On 15 December 2023, the DBT published Consultation: Code of practice on fair and transparent distribution of tips, seeking views on a draft statutory code of practice to support measures in the Employment (Allocation of Tips) Act 2023. The Act, which received Royal Assent on 2 May 2023, amends the Employment Rights Act 1996 to require that employers pass on all tips, gratuities and service charges to workers without deductions, and distribute tips among workers fairly (see FC Feature 5 May 2023). The consultation closes on 22 February 2024.
The consultation follows the Employment (Allocation of Tips) Act 2023 (Commencement No. 1) Regulations 2023 made in July 2023, which brought into force provisions in the Act enabling the Secretary of State to issue a statutory code of practice for employers to promote fairness and transparency in the distribution of qualifying tips, gratuities and service charges (see FC Feature 31 July 2023). Further implementing regulations (as yet unpublished) will be required to bring the Act fully into force.
The consultation seeks feedback from businesses, workers, consumers, trade unions and legal representatives on the Code, which aims to provide statutory guidance on how employers can meet the requirements under the Act to distribute tips fairly and transparently. The Code sets out overarching principles of fairness and suggests how employers might wish to apply these to different aspects of developing and implementing a policy on how tips are treated. It includes:
- guidance on how tips can be gathered and distributed;
- factors which should be considered when distributing tips; and
- details on transparency measures, including requirements to keep a written tipping policy and maintain accurate tipping records.
The government will publish a response to the consultation and final version of the Code in Spring 2024. The Code is expected to come into force alongside full implementation of the Act on 1 July 2024.
First published on the Employment News Service on 18 December 2023.
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