Samantha McCarthy, Manager of Buzzacott's Troncmaster Services, provides the latest update on the Employment Bill announcement and shares what businesses in the hospitality sector can do to champion the allocation of tips prior to the legislation being implemented.
The Employment (Allocation of Tips) Bill, a Private Members' Bill sponsored by Virginia Crosbie MP, completed the final stages and was given Royal Assent on 2 May 2023.
Our article has been referenced in the UK Government's Employment (Allocation of Tips) Bill 2022-23: Progress of the Bill Research Briefing. Read the official documentation here.
What's the Employment (Allocation of Tips) Bill?
The Bill would require hospitality businesses to 'fairly' allocate 100% of tips to workers no later than the end of the month following the month in which the tips were paid by customers. Currently, as the law stands, a tip is the legal property of the hospitality and leisure business and it's a matter for the business to decide how much, if anything, goes to its workers, and when. The Bill would require hospitality and leisure businesses to hold a written tipping policy and keep records of all received and 'fairly' allocated tips. The Bill is estimated to benefit approximately 2million workers in the hospitality sector.
The main thrust of the Bill appears to centre on 'fairness' of tip allocations, and while 'fairness' isn't defined in the legislation, it will be within a statutory Code of Practice that 'stakeholders' will agree upon.
What's next?
We wait for the Code of Practice to be finalised, which needs to be agreed by key stakeholders. This will provide clear guidance as to what constitutes fair tipping and practices. We anticipate the new tipping bill will come into effect from April 2024.
What can my business do?
Our Tronc system already champions the allocation of tips, gratuities, and service charges to workers through tailored tronc systems that are fair, ethical, and protect our clients from any potential challenges from HMRC. We believe there will also be even more advantages to implementing an independent troncmaster once the new legislation has passed, given several potential legislative requirements of an employer would fall away. We are happy to work with any potential client so you meet all necessary tronc requirements and will guide you through any challenges that may arise with the proposed legislation.
Originally published 14 Mar 2023
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