New UK tipping law means £5,000 fines for people who break it

The Employment (Allocation of Tips) Act means staff must receive 100% of the money they earn through tips and service charge, the new Labour Party has said.

People who break the new UK tipping law from this week face £5000 fines. The Employment (Allocation of Tips) Act means staff must receive 100% of the money they earn through tips and service charge, the new Labour Party has said.

The Department for Business and Trade has estimated that the changes will mean around £200m that would have been retained by employers will now be passed on to employees. f an employer fails to meet the requirements of the law, workers will be able to bring a claim through an employment tribunal and claim up to £5,000 compensation.

Bosses must now pay all tips to employees by the end of the month following when they were received, pay the tips to employees at the place of work where the tip was received, rather than sharing them across a group, and also implement a written policy on allocating tips.

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They must also include agency workers and those on zero-hours contracts in a share of any tips given during their shifts. Minister for employment rights Justin Madders said: “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.” UKHospitality chief executive Kate Nicholls said: “New rules naturally come with an administrative burden and businesses will see some additional cost as they work through them in practice.

“It’s another example of costs being placed on a sector that can least afford it, and we continue to urge the chancellor to bring down hospitality’s cost burden at the Budget, primarily through taking action to avoid the billion pound business rates bombshell set to hit the sector next year when relief ends.”

Andrew Tighe, director of strategy and policy at the BBPA, said: “A greater a degree of consistency and transparency when dispersing tips will benefit both existing and new staff alike. We would urge all operators to review the guidance and ensure their policies are compliant with the legislation.”