Lawyers warn of tipping point for hospitality and leisure

Businesses in the service and hospitality sectors are being urged to be ready for long-awaited legislation on tipping.
Dorset law firm Ellis Jones Solicitors is advising business owners and employers to ensure their policies and procedures are compliant with the new rules.
Its call comes after the government announced that its Employment (Allocation of Tips) Act 2023’s code of practice is to take effect on October 1.
The much-anticipated legal changes means that business owners and employers will be required to manage staff tips in a fair and transparent way – with the government intending for the full amount to be passed on to employees.
Key measures include:

  • Tips to be distributed fairly among workers, including those on zero-hours contracts
  • Employers to have a written policy on display about allocation of tips
  • Employees have a right to request information about tipping records
  • A statutory code of practice which will have legal force

Kate Brooks, Partner and Head of Employment/HR Services at Ellis Jones, said: “There is currently no legal obligation for employers to pass on tips and service charges to employees.
“This long-awaited legislation will be welcomed in many quarters for the clarity and structure it brings to a grey area for employers, employees and consumers.
“Although the majority of businesses are responsible employers, those which fail to comply run the risk of credible employment tribunal claims.
“It is important that employers in leisure, hospitality and the service industry understand the new criteria and are ready to meet its requirements.”
The Tipping Act was granted Royal Assent on 2 May 2023, amending the Employment Rights Act 1996.
The government published its draft code of practice in late April with the intention for it to take effect on October 1. The code and implementation date were approved by Parliament on May 14, 2024.
The government says the new rules will protect the tips of two million workers in England, Wales and Scotland in the hospitality, leisure and services sectors, resulting in an estimated extra £200m going into their pockets.
Ellis Jones – with 178 staff including 21 Partners – has six offices across the region and London where it supports businesses, employers and private clients with employment and HR services.
It is sponsoring the Bournemouth Area Hospitality Association (BAHA’s) 2024 recognition awards this year in the HR/Admin/Accounts Award category.
Entries are open before the winners are announced at a gala dinner and ceremony on October 6 at Marsham Court Hotel in Bournemouth.
Visit to find out more about the new tipping legislation and to enter the BAHA awards.

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