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New legislation regarding service charge and tips

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From 1st of October 2024 taxi firms, hairdressers, and hotels, as well as restaurants, pubs and cafes will be banned from withholding tips and/or service charge paid by customers, whether in cash or by card, from workers. 100% of tips/service charge will have to be distributed by the end of the month following the month of collection. For example, if tips/service charge is collected in October, 100% of it will have to be distributed by the end of November. Legislation puts an emphasis on tips/service charge to be distributed FAIRY, meaning that most agency workers will be entitled to a share of it too. Businesses must draw tips/service charge policy, copy of which must be provided to their employees.

You can find more information below:

Code of practice on fair and transparent distribution of tips (HTML version) – GOV.UK (www.gov.uk)

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