Allocation of Tips

Effective from 1 October 2024 the Employment (Allocation of Tips) Act 2023 creates the legal obligation for employers across all sectors to allocate tips, gratuities and service charges which they are paid or which they exercise control or significant influence over to workers without any deductions. Details of the legislation can be found in the Employment Rights Act and the new Part 2B Overview The Act places an obligation on employers to: Pass on all tips and service charges to workers without deductions, except in very limited scenarios, such as deduction of income tax. Provisions around tax in relation to tipping remain unchanged; Ensure that tips are distributed in a fair and transparent manner when the employer takes control, or exerts significant influence, over their…