Employers banned from taking tips off workers as new law introduced

New legislation which stops companies across England, Scotland and Wales from taking employees’ tips has come into force on Tuesday.

The UK Government believes millions of workers will take home an estimated £200m more following the introduction of the Tipping Act on October 1.

Workers now also have the right to request information about an employers tipping record. If a business is found to be breaking the new law, their tipping record can be used as evidence in an employment tribunal.

A business may be forced to reallocate tips and pay up to £5,000 in compensation for every worker affected.

Earlier this year former business and trade minister Kevin Hollinrake stated that the new legislation would “protect the tips of workers” and provide assurances to customers that the money is going to “hardworking members of staff.”

TiPJAR, who help businesses across the world offer a cashless tipping system, were consulted during the development of the code of practice.

Ben Thomas, CEO of TiPJAR, said: “Our hospitality and service industries are powered by a wonderfully diverse and exceptionally talented workforce. For the first time, these millions of workers can trust that tips employers collect on their behalf will always be passed to them.

“As a business providing a platform to get tips to workers quickly, fairly and transparently, we wholeheartedly welcome today’s announcement. We look forward to continuing our work with the DBT and government to develop further guidance as the principles of the legislation are put into practice, supporting businesses across the sector to operate to a consistent and equitable standard in handling tips.”

Minister for Employment Rights Justin Madders added: “When you tip someone for good service, you expect them to keep all their tip. They did the work – they deserve the reward.

“This is just the first step of many in protecting workers and placing them at the heart of our economy. We will be introducing further measures on tipping to ensure workers get their fair share of tips.

“Britain’s outdated employment laws require an urgent update. This Government will ensure they are fit for the modern economy and deliver on our plan to Make Work Pay.”