What is the law on keeping staff tips?
As the law currently stands, employers do not have to allow employees to keep all or even part of the tips they get from customers or clients. Employers are also prohibited from using tips to make up wages for the purposes of national minimum/living wage.
But the Government will change this via the Employment (Allocation of Tips) Act which will require employers to pass on 100% of tips, gratuities. Workers will also get a new right to request more information relating to an employer's tipping record, enabling them to bring forward a credible claim to an employment tribunal.
A statutory code of practice has been developed and is currently the subject of public consultation. This provides guidance to businesses and staff on how tips should be distributed.
Once the consultation has ended, expected to be in late February 2024, the Government will consider and publish its response which is anticipated, along with the final version of the Code, in Spring 2024.
The draft Code states that the aim is for the Code and the full measures of the Act to come into force on 1 July 2024, but further confirmation of this will be needed.
In the meantime, employers should keep in mind the impact taking staff tips will have on employee relations and motivation, engagement and productivity.