New UK Law Mandates Fair Distribution of Tips to Workers

The legislation, effective today, ensures all tips go directly to employees, addressing long-standing concerns about withheld gratuities.

The Employment (Allocation of Tips) Act 2023 mandates that businesses must pass on 100% of tips and service charges to employees.
The law covers various sectors including hospitality, hairdressing, and taxi services, and applies to both cash and card tips.
Employers are required to distribute tips fairly and transparently by the end of the following month from when they were received.
Workers can now bring claims to employment tribunals if their tips are withheld, but unions worry some businesses may still find loopholes.
The UK Government estimates the new law will redirect approximately £200 million annually from employers to workers.