The Employment (Allocation of Tips) Bill would amend the Employment Rights Act 1996 to require employers to ensure that all tips, gratuities and service charges they receive or exercise control over must be paid to workers in full without deductions and by the end of the following month.
It would also enable the Government to create a code of practice intended to ensure fairness and transparency in how the money is allocated amongst staff, and introduce an enforcement mechanism for employees to make complaints and seek redress.
Having passed its third reading today (20 January), the bill, which has been fronted by Conservative MPs Virginia Crosbie and Dean Russell, will proceed to the Lords for further scrutiny.
The Employment (Allocation of Tips) Bill was first brought forward by Russell back in the summer of 2021.
“When we look at the role that many people have when working in bars or restaurants and so on, the tips are often seen as part of the salary in a way — rightly or wrongly,” he said at the time.
“It’s always felt wrong to me that businesses can take the tips that have been given by the customer directly to that individual or to the staff for businesses to go, ‘Well, actually, that’s part of the payment for what they’re getting’.”
This is the latest stage in a long-running saga to introduce more robust tipping laws that stretches back to 2015 when a Government consultation found restaurant customers were overwhelmingly in favour of the tips they paid going to the people who served them.
The Conservatives previously committed to tackling the issue of the unfair distribution of tips in its 2019 manifesto.
In September 2021 the Government announced plans to overhaul tipping practices and make it illegal for employers to withhold tips and service charge payments from workers.
However, that legislation was subsequently shelved.
Last year Labour also pledged to 'stamp out' unfair tip deductions, claiming that hospitality and leisure workers are missing out on around £200m a year.