MORE than one million workers are set to get a wage boost of £200 each thanks to a new rule change.
A new bill that will see employees‘ tips protected received Royal Assent this week – the next step to becoming law.
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The Tipping Bill means that it will be unlawful for employers to keep their workers’ tips, with £200million a year set to go back into their pockets.
It will affect over one million workers in the hospitality, leisure and services sectors who rely on their hard-earned tips to help top up their salary but don’t currently see their tips passed onto them by their employer.
The government estimates that individual workers who don’t already have their tips passed onto them will be better off by £200 each.
Although of course this depends on how many tips you earn and how much they are.
Currently, businesses don’t follow a compulsory code when it comes to tipping – which means they aren’t required by law to pass on gratuities to staff.
The new Bill stops employers from keeping tips intended for staff, and makes sure proper arrangements are put in place to split cash between workers fairly.
It makes it unlawful for businesses to hold back service charges from their employees, ensuring staff receive the tips they have earned.
The new measures are expected to come into force in 2024, following a consultation and secondary legislation.
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Business and Trade Minister Kevin Hollinrake said: “As people face rising living costs, it is not right for employers to withhold tips from their hard-working employees.
“Whether you are pulling pints or delivering a pizza, this new law will ensure that staff receive a fair day’s pay for a fair day’s work – and it means customers can be confident their money is going to those who deserve it.”
Attempts have been made in recent years to put rules in place to protect workers’ tips, but little progress has been made.
Plans to stop restaurant and pub bosses from demanding a share of punters’ generosity were first revealed in 2018, after big restaurant chains were slammed for holding back as much as 10% of tips.
Popular high street chains like Belgo, Bella Italia, Café Rouge, Giraffe, Prezzo and Strada had all previously pocketed a 10% share of their workers’ tips.
In the past, Ask and Zizzi also took 8%, which was reported to have cost UK hospitality workers thousands of pounds a year in extra wages.
A year later in 2019, the Employment (Allocation of Tips) Bill was announced in the Queen’s Speech – but laws have failed to pass through so far.
Most recently, in 2021, the Tipping Bill was put forward by Conservative MP Dean Russell.
Mr Russell, MP for Watford, said: “Hard working people working in hospitality in Watford and across the country will be able to retain their tips, knowing that they will now have a fair deal.
“I have always had reservations that some employers kept tips which were earnt by their staff.
“This new law will stop this immediately and will ensure that the tips are given to the individual staff member, or team.”
The news comes as workers across the country have been hit with rising prices throughout the cost of living crisis.
Soaring energy bills coupled with high inflation has led to many having their wallets squeezed so this new bill will come as welcome relief for workers.
Meanwhile, earlier this month a 10% hike saw the National Living Wage increase from £9.50 to £10.42 an hour.
People on the National Living Wage will see their pay packets rise by 92p which means an additional £32.20 a week and £1,674.40 a year.
Plus, the first part of the £900 cost of living payment has been dished out to over seven million for those in need.
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