Revised Code of Practice for Staff Tips

At the end of April, the Government published a revised statutory code of practice for the fair & transparent distribution of tips. This was originally meant to be implemented in July 2024 but has now been pushed back to October 2024. Despite this delay, employers who will be affected will need to start thinking about how they will implement that changes when the new rules come into force.

The rules apply to employees, agency workers & zero-hours workers & cover tips/service charges paid in cash or vouchers/casino chips or similar with a monetary value or capable of being exchanged for money or money’s worth.

All tips must be fairly distributed to workers by the end of the month following the month in which they were paid by the customer.

Fair distribution does not necessarily mean that employers should allocate the same proportion of tips to every worker, but there must be a written policy in place explaining how tips will be allocated. Employers must use a clear set of objective factors to determine the allocation policy, this could include things like:

  • Worker’s roles or seniority
  • Worker’s basic pay rates
  • Worker’s hours worked during a period when tips are received
  •  Performance
  • Length of service
  • A customer’s intention
Employers must also keep a record of all tops received & how these have been allocated. This record must be retained for three years. Workers will have the right to request details of the total tips received & the amounts allocated to them. Workers will be able to raise a dispute through an employment tribunal & have 12 months to a claim.

Tips are typically distributed to staff using a troncmaster & this practice can continue under the new rules.