After a long delay, the MPs in the UK have given their approval to the Employment (Allocation of Tips) Bill. This means good news for staff in the hospitality sector who are often not passed on the tips that are paid to the restaurants or outlets they work for, by customers through card or other cashless means of payment.
With cashless payments becoming more common, it has become very easy for bar and restaurant owners to hold back the tips meant for the staff.
After six long years, the law that will ensure that the tips are protected and travel down to the employees has received government backing. Once the Bill becomes a law, it will be illegal for hospitality businesses to withhold such tips anymore.
If passed as a law, all tips, service charges and gratuities that customers pay to the restaurants, bars and other hospitality outlets will have to be distributed amongst the staff members.
This will be a welcome amendment to the Employment Rights Act 1996, making it obligatory for employers to ensure that the tips reach the employees.
As the law has taken so long to receive approval, workers, who are already struggling to make ends meet due to low wages, have lost out on an average of about £2,000 per year.
Over two million employees in the hospitality space will benefit from this law.
That is not all, as per section 27K, an employee will be able to approach the employment tribunal if his/her employer has failed to comply with sections 27D and 27G, pertaining to tips and their rightful distribution. A new statutory Code of Practice will also come into effect to guide businesses and employers about distributing tips.
