Blog

A Fair Share for Hospitality: Understanding the Employment (Allocation of Tips) Act 2023

Posted: 09/06/2023

Transforming Tip Distribution and Elevating Employee Well-being in the Service Sector

Heads up hospitality! A new law designed to ensure that all hospitality staff receive the tips left to them by customers has been announced. The Employment (Allocation of Tips) Act 2023 has received Royal Assent and is expected to be in force from 2024.

This will make it unlawful for businesses to hold back any service charges from their employees, meaning that staff will receive the full amount of tips they have earned. The new Act also provides for the development of a new statutory Code of Practice that will give businesses and staff advice on how tips should be distributed fairly and transparently.

In addition to this, workers will have 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 if they believe they have been unfairly treated.

In a significant move to protect the rights and ensure fair treatment of employees in the service industry, the Employment (Allocation of Tips) Act 2023 has been introduced. This Act aims to regulate the allocation of tips received by workers and promote transparency within the industry. Here are some key points:

Establishing Fairness in Tip Distribution:

  • The Employment (Allocation of Tips) Act 2023 addresses the issue of fair distribution of tips received by employees in the service industry.
  • It aims to prevent unfair practices where employers retain or distribute tips at their discretion, potentially depriving workers of their rightful share.
  • Under this Act, employers are required to have a clear and transparent tipping policy, ensuring that tips are distributed fairly among employees.

Enhanced Transparency and Disclosure:

  • One of the essential aspects of the Employment (Allocation of Tips) Act 2023 is the emphasis on transparency and disclosure.
  • Employers are obligated to provide clear information to both employees and customers regarding the tipping policy in place.
  • This includes details on how tips are allocated, any applicable deductions or charges, and the mechanisms to handle tip distribution.

Protection Against Deductions and Charges:

  • The Act prohibits employers from making deductions from tips for any reason other than those specified in the legislation.
  • This protects employees from potential abuse or unfair deductions, ensuring that tips are not used to offset costs such as breakages, till shortages, or administrative fees.
  • The Act clarifies the use of tips and aims to prevent any unwarranted deductions from employees’ earned gratuities.

Strengthening Workers’ Rights:

  • The Employment (Allocation of Tips) Act 2023 serves as a significant step in bolstering the rights of workers in the service industry.
  • It ensures that employees receive their fair share of tips, providing them with additional income and recognition for their service.
  • By establishing clear guidelines and accountability, the Act helps protect workers’ rights and fosters a more equitable working environment.

Positive Impact on Employee Morale and Retention:

  • The implementation of the Employment (Allocation of Tips) Act 2023 is expected to have a positive impact on employee morale and retention within the service industry.
  • When employees feel that their efforts are duly recognised and rewarded, it boosts their motivation, job satisfaction, and loyalty to their employers.
  • Fair allocation of tips can contribute to a more harmonious workplace and a better overall employee experience.

Consumer Perception and Trust:

  • The Employment (Allocation of Tips) Act 2023 also has implications for consumer perception and trust in the service industry.
  • When customers know that their tips will be allocated fairly and used as intended, it enhances their trust in the establishment and its employees.
  • This fosters a positive relationship between businesses and customers, encouraging repeat patronage and a positive reputation in the marketplace

The Employment (Allocation of Tips) Act 2023 is a significant development in ensuring fair treatment and protecting the rights of employees in the service industry. By establishing transparency, preventing unfair deductions, and promoting the fair allocation of tips, the Act brings about a more equitable working environment, something Langley are in complete support of. It positively impacts employee morale, enhances consumer trust, and strengthens the overall service industry. As this Act takes effect, it is a step forward in creating a more just and transparent system that benefits both employees and customers alike.

As you know, we have some incredible integrations to make your life easier. In this instance, it’s no different. With TiPJAR®, you can bid farewell to the hassle of tip management and empower your staff by putting tips directly into their hands.

The user-friendly system allows customers to give cashless tips, which are then distributed fairly and transparently among your team. Whether you run a restaurant, bar, or hotel, TiPJAR® is here to revolutionise how you handle tips.

Discover the benefits of this innovative platform and join the collaborative mission to help tipped workers earn more while fostering a culture of gratitude. If you would like more information on how to integrate this with your EPOS system, please get in touch.

Back to Blog

See how we can help your business…

If you are looking to scale up your business, increase your bottom line, or just deliver the best customer service, Langley Compass Group is here for you.

Get in touch