Whilst I was Minister for Small Business, in the summer of 2022, the Government supported the introduction of the Employment (Allocation of tips) Bill, which has just received Royal Assent. This Act of Parliament will provide protection for millions of workers particularly those in hospitality where tipping is common and is an important step to help overcome the effects of the pandemic.
A Healthy Local Economy, which is one of my priorities in my 6 Point Plan for Loughborough, can only be achieved if we have good working conditions and fair salaries for people working in the hospitality sector in our local area.
80% of all UK tipping now happens by card, as opposed to cash, according to Government statistics published in 2021. This made it easier for some to not pass on tips to their staff. This new Act provides fairness for workers receiving tips and ensures businesses are being fair when distributing tips among workers. Employers must now, by law, ensure that all tips, gratuities and service charges are paid to workers without deductions and by the end of the following month.
Although this bill has been implemented nationally, it will have great benefits for people in Loughborough’s hospitality industry: applying to both those working in hospitality directly and to agency workers working in those businesses. This means that every worker entitled to tips in Loughborough will get their fair share without deduction. Previously, some employers in the UK would include tips in an employee’s wages, which is unfair and wrong. Now, it is law that tips will be given to staff in addition to their hourly wage.
This Act will protect fairness and honesty in the industry: if a customer gives a staff member a tip in recognition of excellent service, it is right that the establishment’s employees – who contribute greatly to a customer having a good or bad experience – get their fair share of tips.
So, this Act will also allow customers in hospitality establishments in Loughborough, and throughout the country, to have the peace of mind that employees will, by law, get to keep the money that has been given in a tip for exemplary service, and will not have to worry that the money kept solely by a boss or distributed unfairly.
I know that many of the business owners in Loughborough – many of whom I meet regularly at my quarterly Loughborough Business Club Business Breakfasts - will have been complying with the conditions of this Act long before it became law, but even so, I am proud that the Employment (Allocation of Tips) Bill will now cement protection for hospitality workers from having their tips withheld, or used as pay throughout the country.
Jane Hunt MP