The new legislation will apply to the hospitality industry in England and Wales. It will provide protection against employers who withhold tips from their employees.
Employers should take positive action now to implement the new legislation. This can be achieved by introducing a new policy in your handbook and training managers and employees on how the law should be put into practice.
How will the Employment (Allocation of Tips) Act will affect your workplace?
The new legislation will apply to the hospitality industry in England and Wales. It will provide protection against employers who withhold tips from their employees.
The new law will create a duty on employers to ensure the fair allocation of all money collected for tips and service charges. Tax and National Insurance deductions will still apply to tips and services charges.
The law will place an obligation on the employer to keep a written record for 3 years of how the tips have been paid to all their employees. Tips will have to be allocated on the site the employee earned the tips as this will give customers total transparency that the tips are paid to the employee to whom they gave the tips.
The law must be applied equally to agency workers who will have the same statutory right to be paid tips earned. It will be illegal to exclude agency workers as this will amount to a direct breach of a statutory right.
A new Code of Practice will supplement the new legislation. The purpose of the Code of Practice is to provide advice to employers on how the law must be implemented in their business to ensure that tips are distributes in a fair and transparent manner. The guide will demonstrate how the law can adopted to all forms of business models. The aim of the law is to ensure better workplace conditions and morale. It will inspire employees to have better confidence in their employers.
Employers should take positive action now to implement the new legislation. This can be achieved by introducing a new policy in your handbook and training managers and employees on how the law should be put into practice. Contact Quest if you need help with staff training and updating your HR documents.
This article is for guidance only. Should have a specific employment related problem please contact the Quest Advice Line on 0116 274 9193.
