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Q&A: New tips and gratuities legislation

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30 September 2024 / Jez Howson
Issue: 4955 / Categories: Comment & Analysis
Jez Howson discusses the changes to how tips and gratuities are managed within the hospitality industry.

The Employment (Allocation of Tips) Act 2023 (E(AT)A 2023) effective from 1 October 2024 introduces significant changes to how tips and gratuities are managed within the hospitality industry.

What are the main provisions of E(AT)A 2023?

The key provision is that it will be unlawful for employers to withhold tips or service charges from their employees. The legislation mandates that 100% of the tips generated in a workplace must be distributed fairly and transparently to employees.

The background to this legislation stems from concerns over the withholding of tips by employers. An estimated £200m was being retained by companies depriving workers of their rightful earnings. This Act which affects over two million workers was introduced following a lengthy consultation process aimed at addressing this widespread issue.

Employers are now required to implement the necessary measures by 1 October 2024 as no transition...

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