Tipping Laws almost in place

This week saw the third reading of the Employment (Allocation of Tips) Bill in the House of Lords which means it can be given Royal Assent – and become law.

The key features of the legislation will be:

• Employers will be under a duty to allocate 100% of qualifying tips, gratuities, and service charges to their staff within 2 months of the tip from the customer.
• Employees will be able to see their employer’s tipping record and have the right to bring a claim in the Employment Tribunal in the event of a dispute, which can award a compensatory order of up to £5,000. 
• Tips must be allocated fairly between all workers at the place of business.
• Employers will be prohibited from making deductions from tips including for credit card fees, bank charges, payroll or other administration costs. These costs must now be covered by the business.
• Agency staff are to be given new rights and must be awarded tips and service charge on the same basis as directly employed staff.

Prior to this last reading Lord Mitchell had raised various questions as to the practical implementation of the law when it comes into force, Conservative peer Lord Johnson responded stating the issues would be dealt with in a code of conduct, which will accompany the bill after it receives Royal Assent. The content of the Code will be critical and once further information is available, we will report further.

It is reported that there may be a phased introduction of the legislation over a 3-to-6-month period but at this stage it is worth starting to work on policies and process on tipping and, how to record of tipping practices.