Fair allocation of tips legislation now in force

The new legislation which requires employers to allocate tips in the workplace fairly and transparently, the Employment (Allocation of Tips Act 2023 (The Tipping Act), came into force on 1 October, along with a new Code of Practice, which an employer must have regard to when devising its policy.  We previously commented on the implications of the forthcoming legislation here and here.

By way of reminder, tips, gratuities and service charges are “qualifying tips” (meaning they are in scope of the legislation), if an employer exercises control or influence over them. The Code indicates that cash tips passed on directly to a worker, or tips made directly to a worker via an app, each without employer intervention, will not be caught. While genuinely self-employed individuals are outside the scope of the Tipping Act, employers should be aware of the risks (as with other employment rights such as holiday pay and national minimum wage) associated with incorrectly characterising someone as self-employed in connection with this new right.