Government confirms tips legislation will be brought forward

Update on tips bill

Since the distribution of tips was referred to in the Queen’s speech in 2019, progress has been slow in bringing legislation into force.

However, tips and gratuities have remained a hot topic within the hospitality industry and stay at the conversation’s forefront. Throughout the COVID-19 pandemic, the Government has been criticised for not including tips and service charges as part of furlough calculations. Moreover, since many hospitality workers relied on troncs to top their salaries when the industry was forced into lockdown, they experienced a significant cut in income despite the introduced Coronavirus Job Retention Scheme (CJRS).

Calls for legislation to protect workers have been reinforced, and the MP Dean Russell brought forward a Private Members Bill known as the Tips Bill, which had its first reading on 21 June 2021. Following this, the bill was withdrawn and instead will be brought forward as part of the upcoming Employment Bill, which will be due to have a second reading on 18 March 2022.

The latest comments from the Government

The Government announced, in response to a parliamentary question, on 1 February, that legislation will be brought before Parliament requiring employers to pass all tips to workers as ‘soon as Parliamentary time allows’.

This is excellent news for all workers in the hospitality sector. It will mean that the legislation will prevent employers from taking any tips (provided by customers for the benefit of employees to recognise exemplary service) and keeping those amounts for their own purposes.

This is, of course, dependent on getting the legislation through Parliament. The announcement has additionally advised that the new rules will not commence earlier than one year after the legislation has been passed.

We have some time to wait, but at least there is a commitment and a will to move this matter forward.

The legislation will also allow employees to request information relating to the employer tipping record. Although this has yet to be set out, we expect this will be in the form of employers providing transparent records of all tips and service charges that they receive.

The future of tips and gratuities

It is undoubtable that some form of legislation will be enforced, whilst progress is slow, there is still progress, and pressure is rising on the Government to take action.

As for the future of tips and gratuities, we expect to see all hospitality employers applying some form of tronc scheme soon. However, it remains the case that an independent troncmaster is the best way to assure fairness and efficiency for the employer and the workers.

We will provide further information and guidance when the legislation starts its route through Parliamentary procedures. To get your tips in order now, please contact us for more details about tronc schemes and see how our troncmaster service can help your business.