Gratuity law: have we reached the tipping point?

2023 is shaping up to be the year of radical change for employment law. While some proposed laws have dominated the headlines, others have not received as much attention as they deserve: enter the Employment (Allocation of Tips) Bill.

Backed by Conservative MP Dean Russell, the Bill seeks to prevent employers from deducting any tips, gratuities and service charges that are left by customers for staff by making certain tipping practices unlawful.

Tip skimming has been a particular bone of contention in the services industry for years. Few may recall the summer of 2015, which proved to be a scandalous season for restaurateurs after a slew of news reports revealed that groupings of well-known restaurant chains had kept a substantial portion, or in some cases, the entire amount of the tips left by customers intended for restaurant staff.

To put this in real terms, according to the Guardian’s 2022 article, employees lose approximately £200 million in tip deductions each year.

It is anticipated that this Bill will be come into force sometime in Spring 2023, so if you require assistance in preparing for this change and the associated legal issues, please do get in touch at joe.hennessy@smb.london