New ‘Tipping Act’ to reshape hospitality sector

The UK hospitality sector is bracing for significant changes as the Employment (Allocation of Tips) Act 2023, commonly known as the ‘Tipping Act’, comes into force on October 1, 2024.

This new legislation aims to ensure fair and transparent distribution of tips to workers, addressing long-standing concerns about employers withholding gratuities.

The Act will require businesses to pass on all tips to staff without deductions, implement clear tipping policies, and maintain detailed records of tip allocation.

With an estimated impact on over 2 million workers across the country, this law represents a major shift in how tips are handled, particularly in an increasingly cashless society where card payments are becoming the norm

Rufus Hood, Country Manager UK at Coople, said: “On 1 October, the government’s ‘Tipping Act’ will come into force, meaning that companies that collect tips from customers will have new legal responsibilities regarding distributing them among staff, including agency workers.

Companies will also be required to have a written tipping policy and share it with staff, as well as being required to keep records of any tips for three years.  

“This will mostly apply to companies where customers regularly pay tips either with cash or card – putting money in a tip jar, making a card payment, or scanning a QR code.

“Any business where the employer receives the tip before the staff do will now be required to pay their employees their tips by the end of the following month. 

“It is major news for the hospitality sector, particularly bars and restaurants – for both employers and employees in this industry.

“On one hand, the Act puts additional pressure on businesses in an industry that is already facing high costs and low bookings.

“However, agency workers will now be legally entitled to the tips customers decide to pay, which will be very welcome news for these staff, who make up a large proportion of the workforce in hospitality. 

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“At Coople, we are currently developing our policy to ensure fair and transparent handling of tips for our Cooplers (agency staff) while also keeping the process as straightforward as possible for our customers.

“We will provide full details before the government deadline of 1 October, ensuring clarity for both our staff and customers.”

For more information, visit: www.coople.com/uk