• Withholding tips from staff becomes unlawful as Tipping Bill achieves Royal Assent

• More than 2 million workers will have their tips protected and be able to view an employer’s tipping record

• An estimated £200 million a year will go back into the pockets of hard-working staff by retaining tips that would have otherwise been deducted

Millions of UK workers will take home an estimated £200 million more of their hard-earned cash, as employers are banned from withholding tips under the Employment (Allocation of Tips) Act 2023, which Tuesday 2 May received Royal Assent.

Many hospitality workers rely on tips to top up their pay and are often left powerless if businesses don’t pass on service charges from customers to their staff.

This Bill makes it unlawful for businesses to hold back service charges from their employees, ensuring staff receive the tips they have earned. The measures are expected to come into force in 2024, following a consultation and secondary legislation.

This overhaul of tipping practices is set to benefit more than 2 million UK workers across the hospitality, leisure and services sectors helping to ease cost of living pressures and give them peace of mind that they will keep their hard-earned money.

UK Hospitality Chief Executive, Kate Nicholls, said:

"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."

Today’s Royal Assent follows a range of government action to support people with the cost of living and help those on lower incomes keep more of what they earn, whilst delivering on the government’s priority to halve inflation. Most notably, last month the National Living Wage increased by 9.7 percent, keeping the government on track to achieve its manifesto commitment for the National Living Wage to equal two-thirds of median earnings by 2024, provided economic conditions allow.

Further recent government action to support households with the cost of living includes extending the Energy Price Guarantee at its current level for another two months, which keeps energy bills at £2,500 for a typical household until the end of June. We have also extended the freeze on fuel duty, saving the average car driver in the UK £100 over the next year.

Background:

• The Government strongly believes that tips, gratuities and service charges should go to workers, rather than employers. Tips are intended to reward staff for hard work and good service, and they should be distributed fairly and transparently. The Government has made this clear since announcing its intention to legislate on this and confirming its support of this Private Members’ Bill.

• The measures in the Employment (Allocation of Tips) Act 2023 will come into force via secondary legislation. We expect the measures to come into force around a year after Royal Assent. We will confirm the date of commencement later this year.

• The measures in the Act will be supported by a statutory Code of Practice. This Code is being developed and will be subject to formal consultation later this year.

• Anyone who has concerns about current or recent employer can contact the Acas helpline on 0300 123 1100.