Allocation of tips: Government supports proposed legislation

In this series, we’re looking at a number of employment law-related Private Members’ Bills that have received support from the government and are progressing through the House of Commons.

The focus for this blog is the Employment (Allocation of Tips) Bill, which has reached the Report stage in the House of Commons.

The main points of the Bill are as follows:

• If the Bill comes into law, it will require employers to allocate “qualifying tips” to workers with no deductions (except than those deductions set out in tax law). According to the Explanatory Notes of the Bill, “qualifying tips” are those “tips, gratuities and service charges which they [employers] are paid or which they exercise control or significant influence over”).
• 
  Employers must ensure those tips are distributed on a fair and transparent basis.
• 
  A statutory code of practice is being developed which would set out the principles of fairness and transparency. Employers would have to have regard to the statutory code of practice. The code of practice would be admissible as evidence in the Employment Tribunal and the Employment Tribunal would have to take it into account in making decisions on the allocation of tips.   
• 
  Enforcement of the Bill’s obligations would be dealt with by the Employment Tribunal. These would include allowing Employment Tribunals to order the employer to revise the allocation of tips or to order an employer to make a payment to a worker or workers of up to £5,000.
• 
  Where tips are made on “more than an occasional and exceptional basis” an employer will be required to have in place a written policy explaining how tips are dealt with, including how they are allocated between workers. This requirement is to make it easier for workers to have the information needed to bring a claim to the Employment Tribunal.
• 
  A worker will have the right to request information relating to an employer’s tipping record.
• 
  The Bill gives the same rights to agency workers as it does to workers.

According to the government’s press release, this Bill would benefit over 2 million workers in the hospitality, leisure and services sectors.

HOW WE CAN HELP YOU

We know that employers in those sectors will be keen to follow progress of this Bill to understand how it will impact them, should it become law, and what they should do to prepare. We’ll be keeping an eye on developments. To receive our updates on this Bill and other legislation, case law and issues that may affect your People and Development issues please subscribe via our website to receive our employment law newsletter and event invitations.

Brabners in Lancashire is located at Sceptre Court, Walton Summit. If you would like to discuss anything raised in this article, please give us a ring on 01772 823921, quote “LBV” and a member of our team will be happy to assist you.  

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