New Tipping Bill achieves Royal Assent : Four key principals you should follow

Withholding tips from staff becomes unlawful as the Tipping Bill achieves Royal Assent, with more than 2 million workers to have their tips protected.

The government are introducing a new law to prevent businesses from pocketing their employees’ earnings.

Under the new law, employers must ensure that all staff receive their tips in full as it will be illegal to withhold them.

Businesses will need a fair and transparent process in place, to distribute tips honestly amongst employees.

Whilst discussions are still being held surrounding the new legislation, there are four key principles you should follow in your tipping practices, as per the GOV.UK code of practice:

1. You should have a written policy that is easily accessible and on public display at work.

2. You should have a process for dealing with customer requests about how you manage tips and service charges.

3. You should make sure that staff understand your policy and can explain it to customers or know where to direct them for more information.

4. You should provide employees with a full breakdown of how you distribute service charges, tips, gratuities, and cover charges, as well as any deductions you make and why.

Once this law comes into effect, you must ensure you allocate staff tips fairly, keep accurate records of any tips given, and have resolutions in place for dealing with concerns from staff, should they question their share of the tip.

We may not be seeing the finished article just yet, as it’s likely to be implemented in July 2024, but we will keep an eye out for further updates.

Stay Informed and Prepared:

As we anticipate the implementation of the Tipping Bill, it’s crucial to stay informed and ensure your business is compliant. If you have any questions or need guidance on adapting to these changes, our Payroll teams at Haines Watts are here to help. By outsourcing your payroll services to us you can expect to receive expert advice and support.   We’re committed to helping you navigate this transition smoothly and maintain fair practices for all your employees.

Contact your local Haines Watts office today.