The new Code of Practice will protect the tips of more than 2 million workers, giving them a fair share of the tips received by a company.  The Government introduced the Code of Practice on the fair and transparent distribution of tips that will have legal effect under the Employment (Allocation of Tips) Act 2023.

The updated Code of Practice will be statutory and have legal effect, meaning it can be introduced as evidence in an employment tribunal.

The Act and secondary legislation make it unlawful for businesses to hold back service charges from their employees, ensuring staff receive all of the tips they have earned. The measures are expected to come into force on 1st October 2024, once they have been approved by Parliament.

This overhaul of tipping practices is set to benefit more than 2 million UK workers across the hospitality, leisure and services sectors helping to ease cost of living pressures and give them peace of mind that they will keep their hard-earned money.

Business and Trade Minister Kevin Hollinrake said:

"It is not right for employers to withhold tips from their hard-working employees.  Whether you are cutting hair or pulling a pint, this government’s legislation which will protect the tips of workers and give consumers confidence that when they leave a tip, it goes to the hardworking members of staff.

"The secondary legislation laid today reinforces our commitment to legally protecting our low paid workers and ensuring a fair day’s pay for a fair day’s work."

CEO of Tipjar, Ben Thomas said:

Hospitality and service industries are part of the fabric of our culture and a cornerstone of our economy.

We are honoured to have consulted with the Department of Business and Trade as they have developed this important Code of Practice clarifying employers’ responsibilities as they pass tips to their hard-working teams.

As a business that exists to help employers distribute tips on the same principles of fairness and transparency, we are confident that this Act will support millions of tipped workers across the UK, and level the playing field for businesses across these sectors. We’re excited to support employers in leveraging the opportunities this will present, as we build a more fair and transparent future.

These measures follow a series of wins for workers after a record National Minimum Wage uplift and boosts to employment protections for parents and unpaid carers, as well as giving all employees easier access to flexible working.