Once in force, if an employer breaks the new rules they can be taken to an employment tribunal where they can be forced to compensate workers and pay hefty fines. Workers will also be able to make a request for information relating to an employer’s tipping record, while a new code of conduct will be introduced setting out how tips should be distributed.
According to the Government, the proposed move is set to help around 2 million people working in one of the 190,000 businesses across the hospitality, leisure and service sectors where tipping is commonplace.
Businesses that receive tips by card currently have the choice of whether to keep them or pass them on to workers. But an increase in card payments has made it easier for businesses to keep tips with 80% of all UK tipping now happening by card. This is despite most hospitality workers – many of whom earn the national minimum wage or national living wage – relying on tips to top up their income.
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