The Bill received Royal Assent on 2 May, becoming the Employment (Allocation of Tips) Act 2023. The Act is expected to be brought into force in May 2024; the date will be confirmed later in the year.
Under the Act employers will be required to fairly allocate tips over which they exercise control or significant influence, and pay them to workers in full within a month of the payment made by the customer. Where tips are paid on more than an occasional and exceptional basis, the employer will also be required to have a written policy, available to all workers, that sets out how qualifying tips are dealt with.
There will be a statutory Code of Practice on the fair and transparent distribution of qualifying tips which employers must give regard to, and a failure to comply with the Code will be admissible in evidence in employment tribunal claims. The Department for Business and Trade will issue a formal consultation on the Code later in the year.
There will also be a duty on employers to maintain a record of qualifying tips and their allocation which will have to be kept for three years. Workers will be allowed to complain to an employment tribunal within 12 months of a failure to comply with the new obligations, and the Act gives equivalent rights to agency workers.
