Employment (Allocation of Tips) Act 2024: When does it take effect?
This Act is expected to come into force from May 2024.
What do we need to know?
- Employers must ensure that 100% of all customer tips, including those paid by credit card, are distributed to staff without any deductions. In particular, it will be unlawful to deduct bank or administrative charges from tips.
- Payment of tips must be made in full to staff no later than the end of the month in which the tip was paid by the customer.
- This law applies to all employees and workers including agency staff and zero-hours workers.
- Employers will be required to have a written policy on distribution of tips to staff. A statutory Code of Practice will be published before the end of 2023.
What do we need to do to prepare?
- Businesses in affected sectors must be ready to hit the ground running when this change comes into force.
- Look at existing payroll systems and practices on tips and work out what, if anything, needs to change.
- Consider voluntary compliance at this stage. This is now commonplace and helps to attract staff in a competitive labour market.
- Prepare your written policy on tips once the Code of Practice is published.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
