This week marks a significant win for UK restaurant workers—thanks to the new Employment (Allocation of Tips) Act, they’ll now keep 100% of their well-earned tips. The new UK tipping law, which came into effect as of October 1, 2024, makes it illegal for employers to pocket any portion of tips, service charges, or gratuities.
In the past, some businesses kept a share of these earnings, but that’s now illegal. Workers can take employers to an employment tribunal if tips are unfairly withheld, with fines and compensation as possible outcomes. The UK government estimates this change will put an extra £200 million into workers’ pockets annually. Here’s what the new law means for workers, customers, and businesses.
What the New UK Tipping Law Means for Workers
With the Employment (Allocation of Tips) Act now in place, it guarantees that restaurant workers take home 100% of their tips, including cash, card payments, and service charges. Previously, some employers kept a portion or unevenly distributed tips. Now, the law requires businesses to give all tips directly to workers.
If an employer doesn’t follow the law, workers can now file a claim through an employment tribunal. This process offers more transparency and ensures the person providing good service receives the tip.
How Much More Will Workers Earn Because Of The New UK Tipping Law?
The UK Department for Business and Trade (DBT) estimates that this new law will give workers an extra £200 million each year. While most businesses already give tips to staff, the law ensures even those that previously didn’t are now accountable.
For workers in the hospitality industry, where tips can make up a large portion of their income, this law represents a significant financial boost.
Legal Recourse: Holding Employers Accountable
Workers now have a clear legal path to recover withheld tips. If employers don’t comply with the law, staff can file a claim in an employment tribunal. If the business is found guilty, it could face fines and may need to compensate employees for any tips withheld.
This legal option empowers workers by giving them the ability to protect their income. With this law, workers have more control over their earnings and the means to challenge unfair practices.
Building Trust with Customers
For customers, the new law creates transparency when tipping. You can now be sure your tip goes directly to the worker who served you, not into management’s hands. This increased transparency helps build trust between businesses and customers.
Restaurants and other service-based businesses can also benefit. They can reassure customers that all tips go directly to staff, creating a positive, transparent dining experience.
Workers: Keep track of all your tips, whether from cash or card. If you feel your employer isn’t complying with the law, don’t hesitate to file a claim through an employment tribunal. Keep records of how your tips are distributed to protect your earnings.
Customers: Feel confident asking restaurants about their tipping policies. The new law guarantees tips will go to the right people, so don’t hesitate to ensure your server is receiving the full amount.
Employers: Review the new law and adjust your tipping practices to ensure full compliance. Clear communication with staff and customers about tip allocation can help build trust and avoid any legal issues.
If you work in the UK, you should also make sure that you understand your employee rights, as it is always important to ensure compliance from businesses.
