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
Other Insights
-
8th May 2026Taxi for “directing mind and will”! A suitable vehicle has arrived: the Crime and Policing Act 2026
From 29 June 2026, the Crime and Policing Act 2026 (“CPA”) significantly expands corporate criminal liability in the UK. Companies and partnerships may now be held liable for any criminal offence committed by a senior manager acting within the actual or apparent scope of their authority, regardless of where the entity is incorporated. In practice, as we discuss in this note, application of the attribution test is not as straightforward as advertised and the likelihood of prosecution will depend heavily on the application of public interest factors.
Read more -
24th April 2026EMI reform now in force: expanded opportunities for growing UK businesses
Significant reforms to the UK’s Enterprise Management Incentive (EMI) regime came into effect on 6 April 2026, marking the most substantial expansion of the scheme since its introduction. The changes are intended to modernise EMI for today’s growth economy by widening eligibility, increasing flexibility and simplifying administration. For scale ups and mid market businesses, the reformed regime presents a timely opportunity to revisit long term incentive planning.
Read more -
31st March 2026The key employment compensation changes coming up in April
From April 2026, compensation limits and statutory rates will increase, affecting sick pay, minimum wage, family-related entitlements, dismissal and redundancy. Our Employment team have picked out the important changes and implementation dates to look out for.
Read more