The Employment (Allocation of Tips) Act 2023, also known as the Tips Bill, has received Royal Assent this week, marking a significant milestone for workers in the hospitality industry. The bill, which now becomes law, aims to protect the rights of staff by ensuring that tips given by customers go to workers, rather than being kept by the business.
Antony Higginbotham, MP for Burnley and Padiham, who has been a strong supporter of the bill, expressed his satisfaction with the outcome:
Those who tip at any of our fantastic local restaurants or pubs do so because they value the service they receive and want to show their appreciation. Making sure these tips are distributed to employees happens in most of the places I’ve been, but this law will ensure it is the case in every establishment. It's about fairness, and that's why I supported the change brought by my colleagues in Parliament.
The Tips Bill was introduced as a Private Members Bill by Watford's MP, Dean Russell, following several years of campaigning for a change in the law. The government backed the bill, highlighting the importance of tips, gratuities, and service charges going directly to workers as a way to reward their hard work and ensure fair and transparent distribution.
As people face rising living costs, it is crucial for employers not to withhold tips from their hard-working employees. The Tips Bill guarantees that staff will receive fair pay for a fair day's work, regardless of their role in the hospitality sector, whether they are making coffee or delivering a handmade cake. Additionally, this law provides customers with the assurance that the tips they leave will reach the intended staff member.
Dean Russell, Conservative MP for Watford, expressed gratitude for the support received during the bill's journey:
I was really honoured to have support of so many colleagues from across the House of Commons and the House of Lords, including Antony Higginbotham to make the Tips Bill a reality.
When the Tips Bill comes into force, it will mean customers never have to ask again if workers will get their tips because they will know 100% will go to the staff.
Business and Trade Minister Kevin Hollinrake stressed the importance of fair compensation:
As people face rising living costs, it is not right for employers to withhold tips from their hard-working employees.
Whether you are pulling pints or delivering a pizza, this new law will ensure that staff receive a fair day’s pay for a fair day’s work – and it means customers can be confident their money is going to those who deserve it.
UK Hospitality Chief Executive, Kate Nicholls, highlighted the significance of tips in the hospitality industry:
Fantastic hospitality experiences don’t happen without a huge effort from our teams, both front and back of house, and tips are a generous way of customers showing their gratitude, while providing a welcome boost to employees’ earnings. Tips are just one part of what makes working in hospitality a great job and career.
We’re pleased to support this new piece of legislation as it comes into law today and look forward to working with Government and other stakeholders on a code of practice that ensures a fair distribution of gratuities amongst all who contribute to providing great hospitality.
The passing of the Tips Bill is part of the government's ongoing efforts to support people with the cost of living. The National Living Wage recently increased by 9.7%, and the government remains committed to achieving its manifesto goal of the National Living Wage equating to two-thirds of median earnings by 2024, provided economic conditions allow.
Today's Royal Assent marks a significant step forward in protecting workers' rights and ensuring fairness in the distribution of tips. The government's commitment to improving the lives of workers across the UK is further demonstrated by actions such as extending the Energy Price Guarantee and freezing fuel duty.
