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Just The Tip: New Legislation Means Employees Will Receive Full Service Tip

Good news has been announced for thousands of hospitality and catering employees up and down the country. Under a new legislation, front of house workers will now be able to keep the entirety of their tip, rather than having to share it with their employer.

Household chains such as Strada and Zizzi are to be forced to pass on 100% of all service charges to staff, in a breakthrough for millions of the country’s lowest paid workers.

The new legislation, which has yet to receive a commencement date, will impact 1.6 million workers across the UK, and their respective employers.

Theresa May is to give details of the new legislation as part of the Tory conference in Birmingham today.

Mrs May said the reforms, which apply across England, Scotland and Wales, were part of the Government’s work to crack down on exploitative employment practices.

She said: “The unemployment rate under this Government is now the lowest since the 1970s – but we want to ensure that everyone is treated fairly in the workplace.

“That’s why we will introduce tough new legislation to ensure that workers get to keep all of their tips – banning employers from making any deductions.”

So what does this mean for employers in the hospitality sector? How can you make sure that you’re sticking to the new law and treating employees fairly.

Geoffrey Isherwood, ELAS Legal Service Manager, details how the changes could impact both parties:

“This has been a long-standing issue with some grey areas as to whether tips went to the employer or the employee when classed as a service charge. The new legislation will clarify the point to stop employers claiming the service charge and ensuring it goes to the employee/s as part of their wages.

The employee/s could then, if necessary, have a clear legal right to claim unlawful deduction of wages under Section 13 Employment Rights Act 1996. It would also put the definition of “wages” under Section 27 Employment Rights Act 1996 beyond doubt which currently states “ wages means any sum payable to the worker in connection to his/her employment”

Employers should always seek advice before failing to offer the correct pay to employees and that is why ELAS is so popular because we offer such advice 24/7 to all our clients.”

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