The implementation of new tipping laws has been pushed back from July to to 1 October, to give businesses time to implement the required changes. The legislation affects all businesses where tips are non-incidental.
The Employment (Allocation of Tips) Act 2023, referred to as the Tipping Act, received royal assent in 2023 and comes into force in England, Scotland and Wales. It will make it unlawful for employers to retain or withhold any qualifying tips – tips, gratuities and voluntary service charges. It includes the requirement that the correct tax and National Insurance deductions are made from the tips at source and passed on to HMRC as a part of the normal payroll process, that 100% of tips are passed on to staff, and providing a written policy governing the allocation of tips which is made available to all qualifying staff.
Kate Nicholls, Chief Executive of UKHospitality, said, “Hospitality is a people business and it’s so important that we reward our staff through a fair and transparent tipping system.
“We’ve been pleased to support this legislation through its journey and it’s good to see that the Government has worked with UKHospitality to deliver guidance and a code of practice that can work for business. With the variety of businesses in hospitality, anything too prescriptive would not have been practical.
“Delaying the implementation for a further three months is an appropriate step. The revised timeframe will now allow businesses to implement any changes required and is evidence of Government acting on feedback from UKHospitality.
“It is disappointing, however, that the Government has not provided greater clarification of agency workers and the payment of tips, which is a particular sticking point for businesses.
“Given the desire from all parties involved to get this legislation right, we would urge Government to work with UKHospitality on providing greater clarity on this issue before the legislation comes into force in the Autumn.”
UKHospitality will be holding a webinar on Wednesday 24 April to go through the finalised code of practice.