Long-anticipated legislation to ensure workers keep the tips intended for them is finally going
through parliament. It’s need to know employer information, particularly for sectors like
hospitality, leisure and services, where tipping is especially high profile.
The Employment (Allocation of Tips) Act 2022 will apply in England, Scotland and Wales (not Northern
Ireland), with the start date yet to be announced. It inserts new employer obligations into the
Employment Rights Act 1996, meaning all tips, gratuities and service charges which an employer
receives, or has control over, must be paid to workers in full, without deductions. Workers should
receive such payment by the end of the following month.
New employer responsibilities come in around fair distribution of tips, potentially even where
there’s what’s known as an independent tronc system to allocate them. Look out, too, for a new
code of practice on what constitutes fair distribution. Most employers will need a written policy on
dealing with tips, plus records of tips received and allocated. Workers will have certain rights of
access to these records. A process for complaint to the Employment Tribunal is also set out.
In short, it means additional employer compliance, backed up by worst case scenarios of enforcement
and awards of compensation at the Tribunal. We should be pleased to provide further help and
advice.