More online www.thecaterer.com House of Lords clears path for


law banning tip deductions All tips and service charge will be paid to workers within strict time limits and employers must keep records of money paid out


Lord Robathan said the new bill will give staff “the opportunity to insist that they are given the service charge that many of us pay” By Emma Lake


A bill that will prevent employ- ers from making deductions from staff tips has cleared the House of Lords and will receive Royal Assent to become law. Conservative peer Lord Roba-


than introduced the Employ- ment (Allocation of Tips) Bill to the Lords for its third and final reading on 21 April. He said: “Most businesses


already allocate tips fairly to their staff, but, regrettably, a minority have not done so. “That gives the staff, who are


often among the least well-paid in the hospitality sector – wait- ers, for instance, and others, stretching beyond the hospital- ity sector, but in particular wait- ers – the opportunity to insist that they are given the service charge that many of us pay whenever we go to a restaurant, so they get the tips rather than the money going to the profits of perhaps a big company. “This does not happen that


much but does happen a bit, and we need to make sure it does not happen at all.”


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Five key points about the tipping bill ●The bill will mean all of the money collected through tips and service


charge must be paid to workers. ●It will no longer be possible to cover the administrative costs of collecting and distributing tips and service charges, including credit


card fees and commissions from funds gathered. ●There will be a strict timeline for distribution of tips. Monies received must be paid to workers by the end of the next month after they are


received. ●Agency staff must be awarded tips and service charge on the same


basis as directly employed staff. ●Businesses will be required to keep more detailed records about the collection and distribution of tips and service charge.


Peers expressed cross-party support for the bill as it passed through the final stage of scrutiny in the House of Lords, despite no amendments hav- ing been made since mem- bers warned of ‘unintended consequences’ during its second reading. In March, Labour peer Lord


Mitchell had voiced concerns about several aspects of the leg- islation including that agency workers will need to be paid tips at the same level as directly employed staff.


Mitchell had also questioned


the inability for employers to deduct costs associated with the processing of credit card pay- ments and a stipulation that would prevent tips being pooled across multiple venues under the same group. In relation to his first point


Conservative peer Lord John- son said the issue would be dealt with in a code of conduct, which will accompany the bill after it receives Royal Assent, although it is unclear how this will be implemented.


The new tipping legislation


will mean that operators must pay teams 100% of tips, making it illegal to withhold any money from workers. The government has esti-


mated the additional costs to be borne by businesses as a result of the bill, which prevents money gathered by tips being used for adminis- trative costs including credit card permissions, will be approximately £140m. The new legislation also


gives staff the power to take any grievances related to tips to an employment tribunal, which can award compensation of up to £5,000. The tribunal will also be able to give a similar order to every other affected worker, even if they have not brought a claim themselves. The government had origi-


nally launched a consultation into tipping practices in 2015. After several delays the private members’ bill was introduced to Parliament by Dean Russell, Conservative MP for Watford.


emma.lake@thecaterer.com 28 April 2023 | The Caterer | 5


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