Overview

This bill aims to ensure fair allocation of tips, gratuities, and service charges to workers in the UK, preventing employers from unfairly keeping or mismanaging them. It introduces new rules and enforcement mechanisms to ensure transparency and fairness in tip distribution.

Description

The Employment (Allocation of Tips) Bill amends the Employment Rights Act 1996 to establish clear rules on how tips should be handled. It defines "qualifying tips" as those received by the employer or under their control, including those received directly by workers but subject to employer influence. Employers must allocate these tips fairly among workers at a given place of business, considering factors outlined in a government-issued code of practice. The bill also addresses:

Independent Tronc Systems:

Employers can use independent tronc systems (third-party systems for distributing tips) if it's deemed fair. These systems must operate independently of the employer and meet specific conditions regarding transparency and payment.

Agency Workers:

The bill extends its requirements to eligible agency workers, ensuring they receive their fair share of tips. Payments can be made through the agency, but without unauthorized deductions.

Information and Record Keeping:

Employers must maintain written policies and detailed records of tip handling for at least three years. Workers can request access to this information. Failure to comply results in potential employment tribunal action.

Enforcement:

Workers can complain to employment tribunals if employers fail to comply with the new rules. Tribunals can order employers to correct their practices and pay compensation (up to £5,000) for financial losses. Similar provisions exist for agency workers.

Contracting Out:

The bill prohibits employers from using contracts to avoid their obligations regarding tip allocation.

Government Spending

The bill's impact on government spending is not explicitly stated in the text. However, there will be costs associated with enforcing the new regulations, potentially through increased resources for employment tribunals and government agencies responsible for overseeing compliance.

Groups Affected

• Workers (including agency workers): Will benefit from clearer legal rights regarding tips and the potential for increased earnings if employers are currently mismanaging tips.
• Employers: Will face new legal obligations regarding tip handling, record-keeping, and transparency, potentially increasing administrative burdens and costs. They may face penalties and legal action if they don't comply.
• Employment Tribunals: Will likely see an increase in cases related to tip allocation disputes.
• Independent tronc operators: Will have new requirements and responsibilities if they are involved in managing tip distribution.

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