New legislation backed by the government would ensure that workers in the hospitality and service industries keep their own tips.
To combat the growing trend of employers withholding tips from their staff – many of whom work for minimum wage – new laws would guarantee 100% of service charges are passed onto employees, without deductions.
The issue has become particularly pronounced in recent years, as digital payments – rather than cash – rely on employers proactively passing on tips from customers to their employees.
The Employment (Allocation of Tips) Bill
The proposed legislation, brought to Parliament by Dean Russell MP for Watford, has quickly gathered support from the government.
New laws would put in place a revised statutory Code of Conduct, making clear the expectations for businesses and staff on how tips should be distributed.
Moreover, employees will be able to challenge businesses that they believe are behaving unscrupulously, with mechanisms to be devised so that staff have the right to request information on the company’s tipping record.
In the face of inflation, a cost of living crisis and sharply rising energy costs, The Employment (Allocation of Tips) Bill is likely to benefit over 2 million workers in the UK.
Discussing the issue at large, Russell said: “I am delighted that my Tips Bill has passed second reading in Parliament. It is fantastic that we are on track to securing a fair deal for millions of people working in hospitality across the country.
“It has always felt wrong that some employers have retained tips intended for their staff. This new legislation will halt this practice, particularly given the current challenges around the cost of living. I would like to thank all of the businesses and stakeholders that have got in touch to voice their support.
“The move towards a cashless society has exacerbated the problem of companies keeping card tip payments for themselves, and today’s measures, once in law, will ban that practice.”
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