This week, it was announced by the government that employees in sectors such as hospitality and service industries will, by law, be entitled to all customer tips. This is a significant shift which will make it illegal for companies to withhold tips from workers.

The aim of this law is to create fairer practices across industries where tipping is common, such as, hospitality, taxis, and beauty salons.

Under this law, businesses are no longer permitted to deduct administrative fees or any other charges from the gratuities left by customers. For workers, this new regulation means greater transparency and fairness, which they may not have had before.

Employers will now be required, by law, to provide employees with access to their company’s tipping policies. This includes records of how much the company has received in tips. This transparency is designed to ensure that workers receive the full sum of their hard-earned tips.

Kate Nicholls, Chief Executive of UKHospitality, expressed her support for the legislation, stating, “These changes rightly ensure tips hard-earned through excellent service will end up entirely in their pockets.”

The new law, which affects over three million employees, is a welcome change for workers who previously may have lost a portion of their tips to employers. According to government estimates, the regulation could increase the total amount of tips taken home by employees by as much as £200 million annually.

Not only will workers see immediate benefits from the new law, especially as we come into the busy festive period; but the law will also expand their legal protection.

It’s worth noting that this widens the scope for potential claims for unlawful deductions of wages, as the new law incorporates tips in the definition of wages. This means workers have a stronger legal case in claiming when tips are unfairly withheld.

Overall, the law represents a significant step forward in protecting workers’ rights, fostering a more transparent system for tipping in the UK. For employees, this change ensures that their hard work will be properly rewarded and recognised, with all customer tips going directly into their pockets.

For businesses, the new regulation encourages fairer treatment of staff and greater transparency in how tips are handled, reinforcing the importance of rewarding exceptional service directly.

If you believe your employer is unlawfully withholding your wage, contact one of our expert employment law specialists today. Farleys’ employment law specialists are always keeping up to date on current and upcoming changes to employment law. This means that we can offer the best possible, up to date advice. Get in touch today on 0845 287 0939 or contact us by email.