New Tipping Rules and Code of Practice

A new law is being introduced that requires businesses to pay their workers 100% of all tips they earn.

This law is intended to benefit workers in the hospitality industry who rely on tips to make a living wage. The law is set to go into effect on 1st October 2024 and applies to all businesses in England, Scotland and Wales. Employers who do not comply with the Code of Practice may face enforcement action from the government.

The new Code of Practice on workers' tips means that employers will need to ensure that they are fairly and transparently allocating tips to workers within one month of the end of the month in which they were received. This means that employers will need to keep track of all tips received by their workers and ensure that they are distributed fairly among all eligible workers.

Additionally, employers will need to ensure that they are deducting the correct amount of PAYE from tips, and that they are not making any unauthorised deductions from tips

Internet link: HMRC Code of Practice