Model Policy on Tips
MS WordVersion 1, August 2024
The Employment (Allocation of Tips) Act 2023 (the Act) was granted Royal Assent on 2 May 2023, amending the Employment Rights Act 1996 (ERA) through the implementation of Part 2B ERA The Department for Business and Trade (DBT) published its Statutory Code of Practice on the fair distribution of tips. This will take effect from 1st October 2024 and will be applicable to Great Britain only and will not apply to Northern Ireland. The code outlines how the act will apply to employers and gives guidance on factors to be considered when determining the fair distribution of tips.
The act aims to ensure fair and transparent allocation of tips, gratuities, and service charges. It creates an obligation for tips to be passed on to employment businesses without deduction and a further obligation for agencies to pay qualifying tips to workers subject to deductions that are permissible in law. We have drafted this template policy as a tool to assist REC members with meeting their obligations.
