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Government publishes draft tipping code of practice

The publication of the code of practice follows the introduction of the Employment (Allocation of Tips) Act 2023.

What do we already know?

The Act, passed in the early summer, includes a number of measures regarding tipping that businesses must adhere to:

  1. 1

    All tips must be paid to staff – with no deductions.

  2. 2

    Tips must be paid by the end of the month following when tips were received. For example, if tips were received in July, they must be distributed to staff by the end of August.

  3. 3

    Each business must have a policy on the distribution of tipping.

  4. 4

    Agency workers are eligible for tips.

  5. 5

    There can be no pooling of tips between sites.

  6. 6

    There is a responsibility for record keeping of tips and employees have a right to request this.

What is in the draft code of practice?

There are two key elements of the code of practice for members to be aware of:

  1. 1

    Employers should use a clear and objective set of factors to determine the allocation and distribution of tips. The choice of factors should be fair and reasonable given the circumstances and the nature of the individual businesses.

  2. 2

    There are several factors which may be considered by employers, when setting up their tipping policy:
    • Type of role or work.
    • Basic pay.
    • Individual and/or team performance.
    • Seniority or level of responsibility.
    • Length of time served with the employer.
    • Customer intention.

The code of practice will be consulted on, with responses open until 22 February 2024. The Government proposes that it comes into force on 1 July 2024.

Our response

Our Chief Executive Kate Nicholls said: “The code of practice has been much anticipated and it’s positive that it has finally been published so that the sector can provide feedback and begin to plan.

On initial reading, we’re pleased that the code of practice recognises the variety of different business models within hospitality and that the code of practice is not too prescriptive, allowing tips to be based on the circumstances of a role, for example.

“We’ll be working closely with the Department of Business and Trade to provide feedback from members and ensure the final date of implementation allows businesses ample time to digest and implement the requirement under the code of practice.

“More guidance on how the overall legislation will operate, alongside the code of practice, is expected soon and we will continue to analyse these updates as they come.”

UKHospitality will be holding a webinar in early January to take members through the details of the draft code of practice and hear their feedback.