The Employment (Allocation of Tips) Act 2023, also known as the Tips Bill, has received Royal Assent this week. The bill will help to ensure that workers in the hospitality industry receive the tips and gratuities given by customers, rather than businesses retaining them. The legislation will protect the rights of staff and will ensure that they receive their fair share of tips and gratuities.
The Government backed the Tips Bill with agreement that tips, gratuities and service charges should go to workers, rather than employers. Tips are intended to reward staff for hard work and good service, and they should be distributed fairly and transparently. The Government made this clear since announcing its intention to legislate on this and confirming its support of this Private Members’ Bill.
As people face rising living costs, it is not right for employers to withhold tips from their hard-working employees.
This new law will ensure that staff working in hospitality, whether making coffee or providing service in a restaurant or hotel, receive fair pay for a fair day’s work. It also means that customers know that the staff member will receive the tip they leave.
St Austell and Newquay’s Member of Parliament Steve Double backed the campaign. He said:
“With so many people in our constituency and across Cornwall working in hospitality, I was pleased to back the campaign to introduce the Tips Bill and go on to support it on its journey through Parliament.”
“As former Chair of the All Party Parliamentary Group for Tourism and Hospitality I know just how important the hospitality trade is to our economy nationally as well as in Cornwall, and will continue to do all I can to ensure the people who work in it are supported.”
UK Hospitality Chief Executive, Kate Nicholls, said:
“Fantastic hospitality experiences don’t happen without a huge effort from our teams, both front and back of house, and tips are a generous way of customers showing their gratitude, while providing a welcome boost to employees’ earnings. Tips are just one part of what makes working in hospitality a great job and career.”
“We’re pleased to support this new piece of legislation as it comes into law today and look forward to working with Government and other stakeholders on a code of practice that ensures a fair distribution of gratuities amongst all who contribute to providing great hospitality.”
Today’s Royal Assent follows a range of government action to support people with the cost of living and help those on lower incomes keep more of what they earn. Most notably, last month the National Living Wage increased by 9.7%, keeping the government on track to achieve its manifesto commitment for the National Living Wage to equal two-thirds of median earnings by 2024, provided economic conditions allow.
Further recent government action to support households with the cost of living includes extending the Energy Price Guarantee at its current level for another three months, which keeps energy bills at £2,500 for a typical household until the end of June. We have also extended the freeze on fuel duty, saving the average car driver in the UK £100 over the next year.