Legislation being brought in for tipping, gratuities, cover and service chargers

News  |   4 October 2021

Written by
Elliott Flockhart, Associate

The government has announced plans to introduce legislation in response to a consultation on tipping, gratuities, cover and service charges. The legislation, which will be included in the forthcoming Employment Bill, will prevent employers making any deductions from tips received by their staff, excluding those required by tax law. Of the 173 responses to the consultation, nearly 70% of respondents were in support of preventing any employer making deductions from discretionary payments.

The new legislation will ensure tips are passed on to workers without deductions being made and will require employers to distribute tips in a fair and transparent way. Furthermore, the measures will enable workers to make a request for information relating to an employer’s tipping record, and the employer must respond within four weeks. Employers will also be required to have regard to a statutory Code of Practice on Tipping; a provision of which 61% of respondents strongly supported.

The consultation response also confirms that breaching these obligations and failing to comply with the measures will be enforced in Employment Tribunals.

Advice

If you need assistance or advice on the contents of this article, please contact the Employment Team at Thackray Williams LLP 020 8290 0440.

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