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Tips and gratuities

Published: 02 November 2021
Time to read: 2 mins

The UK government has announced that it will introduce legislation in the upcoming Employment Bill governing the handling of tips and other discretionary payments made to workers. Their intention is to provide fairness for employees and transparency for customers.

There is currently no legislation which specifies that workers must receive the full proportion of tips received. The proposed measures will prevent employers from making any deductions from tips received by their employees other than those required by tax legislation. They will also be required to ensure they have a written policy on tips which provides a fair and transparent means of distribution. Employers will still be permitted to distribute tips through a tronc, which is a special pay arrangement for the distribution of tips, but tips must be dealt with no later than the end of the month following the month in which the tip was paid by the customer.

Employers will also have to keep tipping records and employees will be able to make a request for information relating to these records. They will be entitled to a response to such a request within four weeks.

There is currently no date specified for the introduction of these changes. However, employers should look out for any updates as workers will be able to bring claims to an employment tribunal on the basis of failure to comply. Further guidance is likely to be published in the form of a statutory Code of Practice.

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