New Law Ensures Workers Receive 100% of Tips Across Great Britain
As of Tuesday, a new law in Great Britain mandates that all tips, whether given by cash or card, must be passed on to workers. The Employment (Allocation of Tips) Act is expected to benefit over three million service workers across industries such as restaurants, cafes, and taxi firms.
Law targets businesses engaged in unfair tipping practices
The goal of the law is to ensure transparency and fairness in how tips are distributed, addressing a long-standing issue where some businesses withheld tips or deducted a portion before passing them to employees.
The law stipulates that businesses must distribute tips by the end of the month after they are received, and workers are entitled to request a breakdown of how tips are shared every three months.
This move is expected to create a level playing field, ensuring that businesses cannot profit from withholding tips from workers and that those who provide the service directly receive their fair share.
The government estimates that around £200 million in tips, previously retained by employers, will now reach workers' pockets.
Minister for Employment Rights, Justin Madders, emphasised that tips should go to the workers who earned them, stating, "They did the work – they deserve the reward."
Employers who break the law could face fines or be taken to employment tribunals.
Union welcome new law, but concerns remain
Unite, the union that campaigned for this change, welcomed the legislation, saying that it will make a significant difference for low-paid hospitality workers.
Some in the industry are prepared for the changes. Andrew Tighe from the British Beer and Pub Association (BBPA) called the law a step towards greater transparency, while Ben Thomas, CEO of TiPJAR, praised the government for protecting workers. Nisha Katona, owner of Mowgli Street Foods, noted that while the law is necessary, it might challenge businesses that are unprepared for its implementation.
Some concerns also remain about some employers finding ways around the law. Unite highlighted examples such as Miller & Carter, a steakhouse chain, where tipping policies might still leave some workers with less than their fair share.
In Northern Ireland, the law has not yet been introduced, leaving workers there at a disadvantage. Neil Moore from Unite criticised Stormont's delay in implementing similar protections, saying that it leaves workers vulnerable to employers retaining tips.
Despite the positive impact for many, there is still uncertainty about how tips should be distributed among staff of different roles or seniority levels. As the new rules come into effect, businesses are encouraged to review their policies to ensure compliance and fairness in distributing customer gratuities.
