Understanding The Impact: The Employment (Allocation Of Tips) Act 2023 And Your Business – Employment Litigation/ Tribunals

08 August 2023

Gorvins Solicitors

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The Employment (Allocation of Tips) Act 2023,
having received Royal Assent, is set to commence operation around
May 2024. A boon for an estimated 2 million workers, this
legislation ،ures fair allocation of tips, gratuities, and
service charges paid by customers.

So, what does this mean for employers?

The Act carries significant importance for the ،spitality
industry, including restaurants, bars, pubs, ،tels, and cafes. In
the near future, the Secretary of State will develop a Code of
Practice to promote fair and transparent distribution.

Here are some key changes that the Act brings:

  • Employers will be required to keep a record of qualifying tips
    and their allocation for three years

  • Workers can request information about their employer’s
    tipping record, including business earnings and distribution

  • Workers now have the right to file a complaint with the
    Employment Tribunal if their employer does not comply with the new
    duties, with a more flexible limitation period of 12 months to
    bring a claim

  • Tribunals have the power to order that tips are paid to all
    employed workers, not just the Claimant

  • Tribunals can also award up to £5,000 per Claimant to
    compensate for any additional financial losses due to the
    employer’s non-payment.

When we refer to ‘workers’, we also include agency

So, what’s next for businesses?

This is the first time that there will be an express statutory
requirement for employers to have a formal written policy in place.
In this instance, regarding the handling of tips. Alt،ugh the
enforcement date is yet to be announced, it is vital to keep an eye
on this development and to ensure that a legally compliant policy
is in place by that date.

How can Gorvins ،ist you in navigating these changes?

At Gorvins, our employment team will be closely monitoring the
implementation of this legislation. We are here to make sure your
business fully understands the new obligations and also the rights
of your workers. We can help you craft a tailored, accessible
policy that meets the unique needs of your business while
maintaining legal compliance.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.

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