Guide for Hospitality Workers: What You Need to Know About the Employment

(Allocation of Tips) Act 2023

The Employment (Allocation of Tips) Act 2023 is a new law designed to protect workers like you, ensuring that all the tips, gratuities, and service charges left by customers make their way to the people who deserve them—you and your colleagues. Here’s a breakdown of how this law works and what it means for you.

 

What Does the Act Mean for You?

The law requires that every tip paid to your employer, or controlled by them, must be given to workers without any deductions. This means no more unfair practices where tips are skimmed off for admin fees or other costs. If a customer leaves a tip, it’s meant for you and your team, and that’s exactly where it should go.

 

What Are "Qualifying Tips"?

Under this law, tips, gratuities, and service charges that are either paid to your employer (like tips added to a card payment) or controlled by your employer count as "qualifying tips." If customers give you cash directly and you or your colleagues share it among yourselves, that stays outside the Act’s rules. The law only steps in when your employer handles the tips.

 

How Are Tips Shared Fairly?

The Act makes it clear that all tips must be shared fairly among the workers. To ensure fairness, your employer needs to follow certain rules and must distribute the tips in a way that everyone agrees is transparent and just. A Code of Practice is being developed to help guide employers on what fair distribution looks like, considering that every workplace handles tips differently.

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What Does Your Employer Have to Do?

Your employer now has some responsibilities under this new law. They need to make sure that all tips are given to the workers and are distributed fairly. They must also create a written policy that explains exactly how tips are handled in your workplace. This policy should be available for you to see, so if you’re ever unsure about how tips are being shared, you have the right to ask for this information.

If you ask, your employer also has to show you records of the tips they’ve received and how much of those tips have been given to you. This is your right under the Act.

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What If Things Aren’t Done Fairly?

If your employer doesn’t follow the rules set out by the Act, you have the option to take your case to an Employment Tribunal. The tribunal can order your employer to make changes to how tips are shared or even require them to pay compensation to affected workers.

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Your Right to Information​

If you’re uncertain about how tips are being managed in your workplace, don’t hesitate to ask your employer for a copy of the tip-sharing policy. They are required to give you access to this information. You can also request records showing how much in tips was received and how much was allocated to you. These are your rights under the new law.

 

What the Act Doesn’t Cover

It’s worth noting that this Act doesn’t interfere with situations where customers tip you directly in cash, and you or your colleagues keep or pool it among yourselves. In these cases, the employer doesn’t get involved, so the Act doesn’t apply.

 

Why This Act Is Important

This law was created to ensure that tips left by customers, as a thank you for great service, go to the people they’re meant for. It’s about making sure there’s fairness across the board, so everyone is playing by the same rules. It also ensures that employers who were already doing the right thing won’t be undercut by those who weren’t.

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What You Should Do Next

If tips are handled by your employer where you work, make sure you’re aware of the policy they have in place. It should be available for you to see. And remember, you can always ask to see the records of the tips you’ve earned. If you have any concerns, don’t hesitate to reach out for advice.

The UK Hospitality Union is here to support you. If you have questions or need help with anything related to the Employment (Allocation of Tips) Act 2023, we’re just a message away. We’re here to make sure you’re treated fairly and get what’s rightfully yours.

 

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