Employment (Allocation of Tips) Act 2023

Nikki Hampson
Solicitor
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The Government has recently announced that the Employment (Allocation of Tips) Act 2023 and the Statutory Code of Practice on Fair and Transparent Distribution of Tips, will now come into force on 1 October 2024. The Act and Code of Practice were previously scheduled to come into force on 1 July 2024.

Under the Act:

• Employers must ensure that all qualifying tips, gratuities and service charges attributed to a place of business are allocated fairly between, and paid to, workers of that place of business;
• Tips must be allocated and paid by no later than the end of the month in which the tip was paid by the customer;
• Employers of businesses who on more than an occasional and exceptional basis pay tips, gratuities or service charges must have a written policy in place detailing whether the employer requires or encourages customers to pay tips and how these tips will be allocated and paid to staff;
• Where tips are paid on more than an occasional and exceptional basis, the employer must create a record of how each qualifying tip, gratuity or service charge has been dealt with and maintain these records for three years beginning on the date on which the tip was paid; and
• A worker has the right to make a written request for the employer to provide records of tips received during a specified period and the employer must provide the worker with these records within four weeks of the date of the request (the employer must provide the records in respect of the period requested or a substantially similar period).

The Statutory Code of Practice on Fair and Transparent Distribution of Tips has been designed to assist employers with understanding their obligations under the Act and to promote fairness and transparency in the distribution of tips. You can read the final draft version of the Code,  here.

If you would like to discuss the implications of the Act, or if we can assist on any other employment law matter, please don’t hesitate to contact a member of the team on 0141 331 5150.

Topics: Tips