Overview

The Employment (Allocation of Tips) Bill aims to ensure that tips, gratuities, and service charges paid by customers are fairly allocated to workers. The bill introduces new regulations to govern how employers must handle these payments, promoting transparency and fairness in their distribution.

Description

This bill amends the Employment Rights Act 1996 to introduce a new Part 2B covering tips, gratuities, and service charges. Key aspects include:

Defining "Qualifying Tips"

The bill defines qualifying tips as those received by the employer or under payment arrangements with the employer, and worker-received tips under employer control or connected to controlled tips.

Fair Allocation

Employers must allocate the total amount of qualifying tips fairly among workers at a given place of business. This includes considerations of fairness based on any code of practice issued by the Secretary of State.

Independent Tronc Systems

The bill allows for independent tronc systems (pooled tip systems managed by a third party) where deemed fair, relieving the employer of direct responsibility for allocation.

Timing of Payments

Employers must allocate and pay out qualifying tips by the end of the month following the month they were received.

Agency Workers

The bill extends its provisions to eligible agency workers, enabling tips to be paid through the agency or directly to the worker, preventing unauthorised deductions.

Information and Record Keeping

Employers must maintain a written policy on tip handling and keep records for three years, accessible to workers upon request. Workers can also request records of their own tips.

Enforcement

Workers can complain to an employment tribunal regarding non-compliance. Tribunals can issue declarations, orders for compliance, and compensation (up to £5,000).

Code of Practice

The Secretary of State will issue a code of practice to promote fairness and transparency in tip distribution, subject to parliamentary approval.

Restrictions on Contracting Out

Agreements requiring workers to reimburse tips to employers are declared void.

Government Spending

The bill does not directly specify additional government spending. However, increased enforcement and potential tribunal cases could indirectly increase costs for the government.

Groups Affected

The bill directly affects:

• Employers: New responsibilities for handling and allocating tips, record-keeping, and compliance with a code of practice.
• Workers: Potential for fairer tip distribution and increased protection against unfair practices, with the right to bring complaints to tribunal.
• Agency Workers: Extended protections and rights regarding tip allocation.
• Employment Tribunals: Increased caseload related to tip disputes.

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