Government backing of the Tipping Bill – what does this mean for hospitality workers and their employers?

On the 15 July 2022, the Government announced its support for the introduction of the Employment (Allocation of Tips) Bill, referred to as the “Tipping Bill”. The Tipping Bill is a Private Member’s Bill which was introduced by Dean Russell MP to ensure that all tips, gratuities and service charges paid by customers are allocated to hospitality workers.

Why was the Tipping Bill introduced?

The Bill was introduced in an attempt to prevent controversial tipping practices in the UK, as many workers are not receiving any discretionary payments for service. The aim is to ensure there is a greater level of transparency in relation to tipping (so customers are aware of who their money is going to) and to help workers increase their income. The Bill will make it unlawful for businesses to retain these discretionary payments, helping an estimated two million hospitality workers.

What can we expect to see in the new Bill?

A new Statutory Code of Practice will provide guidance and advice to staff and businesses on how tips should be distributed (to ensure a fair and transparent distribution to workers). Workers will also have rights to request further information directly from their employers in relation to their tipping record - a right which workers do not currently have.

What does this mean for hospitality businesses?

Crucially, the ability to request information in respect to a business’ tipping record will undoubtably assist workers in pursuing credible claims in the Employment Tribunal. If it is found that businesses are unlawfully withholding tips, workers may have a claim for Unlawful Deduction from Wages. Businesses will be liable to repay the wages owed, but Tribunals may also award financial compensation for sums it “considers appropriate”.

It is recommended that businesses operating in the hospitality sector should start to re-consider their policies and practices on discretionary service payments, despite it currently being unknown when this legislation will come into force or how the tipping should be distributed to ensure it is “fair”.

Once this legislation comes into force, businesses will want to ensure their tipping practices adhere to the Statutory Code and guidance, to avoid an influx in Tribunal claims.

For more information on this article, please contact Su Apps or Amy Grant.