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New laws governing ‘tips’ on the way?

October 18, 2021
Employment Law

The question of what happens to the tips we leave for staff in bars and restaurants has been a bone of contention for many years. So could the government’s plans to legislate in this area provide clarity at last?

What’s it all about?

As long ago as 2016, the government went through a consultation exercise in which it invited feedback on the current situation and how (if at all) tips ought to be regulated. It has taken five years, but the government has now set out the bare bones of its plan for new laws in this area.

In simple terms, the government proposes the following:

  • A new regime under which all tips must go to staff, with the only deductions permissible being those relating to tax and NI;
  • It will be illegal for employers to withhold tips, with employees able to bring Employment Tribunal claims against employers who do so;
  • In order to assist employees in bringing Employment Tribunal claims, they will have a new right to request information from their employers about their tipping record; and
  • The introduction of a statutory code of practice in relation to tipping, which employers would have to take into account.

Good news?

All of this sounds like good news both for workers in the hospitality sector and for those of us who leave tips. What is less reassuring is that these and other new employment laws are only likely to come into force once there is parliamentary time enough to debate and pass the relevant legislation. Given all the other issues demanding the attention of our politicians right now, it’s anyone's guess when this issue will rise to the top of the government’s ‘to do’ list.

For now, the uncertainty regarding tipping practices will remain.

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