Bid to guarantee tips for hospitality workers moves closer to becoming law

A long-delayed plan to ensure hospitality workers and others receive their tips in full has cleared the Commons with cross-party support.

The Employment (Allocation of Tips) Bill would introduce a legal obligation on employers to ensure all tips, gratuities and service charges are paid to workers in full.

It would also enable the Government to create a code of practice intended to ensure fairness and transparency in how the money is allocated amongst staff, and introduce an enforcement mechanism for employees to make complaints and seek redress.

A government consultation launched in 2015, found restaurant customers were overwhelmingly in favour of the tips they paid going to the people who served them.

Following several delays, the proposal has now made progress via a private member’s bill – which received its third reading in the Commons on Friday and will now proceed to the Lords for further scrutiny.

Tory MP Virginia Crosbie, the current sponsor of the Bill, told the Commons: “The tipping Bill has a simple message: to promote fairness and to promote transparency, to ensure that workers receive the tips they earn. This will create a level playing field for businesses who are already passing on tips to workers in a fair and transparent way.

“It will create confidence for consumers, who will know that the full value of the tip that they give will go to the workers.”

The MP for Ynys Mon added: “It is estimated that this Bill will benefit around one million workers in the sector, with a financial benefit of around £200 each year.

“With the cost of living at the front of a lot of people’s minds, this Bill will help those workers who are wrongly not receiving the money that they are due from the tips that they have earned.”

She said “most businesses” are passing on tips to staff in full, but said: “We know that there are some unscrupulous employers who exploit staff by retaining some, or even all of the tips that the workers earn.”

Business minister Kevin Hollinrake was asked about his own tipping habits by Conservative colleague Richard Fuller (North East Bedfordshire).

The minister replied: “Do I tip? Yes, by standard – if there’s no service charge applied – I’d tip usually 10%, sometimes more based upon performance, sometimes I’ll tip nothing if I don’t feel the service has been at that level.

“Do I pay a tip if I don’t pay for the meal? I normally pay for the meal as well actually, but I have offered to on occasion.”

Mr Hollinrake said the Bill will protect workers from “bad bosses” and give them an avenue to seek remedies.

He said: “Businesses will be assured they are not being undercut by companies where bosses are keeping tips for themselves.

“Consumers will have increased confidence that their tips are going to the workers they are intended for.”

Conservative former minister Dean Russell, who initially brought forward the Bill, earlier said the idea has been “gestating” in government and society for “many years”.

In October 2018, then prime minister Theresa May announced plans to deal with tips but Brexit turmoil prevented the legislation going ahead.

Similarly Boris Johnson, when he was in the top job, also looked to make the change when in October 2019 the Queen’s Speech committed to bring forward the Employment (Allocation of Tips) Bill.

Following the snap general election that year, the Queen’s Speech incorporated the measures into a proposed Employment Bill – but it did not materialise in the last parliamentary session.

The Queen’s Speech in May 2021, did not list an Employment Bill or a specific tips bill.