Legislation has been passed that gives workers the right to be given tips, gratuities, and service charges in full, with no deductions for processing fees.

The legislation also requires employers to ensure these tips are allocated fairly, and paid to all workers.

The legislation refers to the Code of Practice, and therefore means that employers must have regard for it when determining what would be a fair allocation of qualifying tips, gratuities, and service charges.

How does it work?

The payment of the tip, gratuity or service charge must be paid no later than the end of the month following the month in which the customer paid it.

Records must also be created of how every qualifying tip, gratuity and service charge is paid. These records must be maintained for a three-year period beginning with the date on which the qualifying tips, gratuity or service charge were paid.

Furthermore, a worker may make one written request in any three-month period for records of qualifying tips, gratuities and service charges, which the employer will be required to provide within a reasonable time period, so long as the disclosure does not contravene data protection.


Under the legislation, a worker can complain to an Employment Tribunal and must do so before the end of a three-month period which begins with the date of the alleged failure.

Complaints can be made in respect of:

• An employer failing to comply with the Regulations that require an employer to set out how and when tips etc. must be dealt with; and

• An employer failing to comply with its obligations for having a written policy and maintaining records.


If an Employment Tribunal finds in favour of the worker, it may order the employer or agent to pay an amount, not exceeding £5,000, that is appropriate to compensate for any financial loss. It may also require an employer to comply with the requirement to have a written policy and maintain and provide records.

Remember, by following the Tipping Code of Practice, both employees and employers can contribute to creating a positive and fair workplace culture.

How Hallidays HR can help

If you would like to discuss any of the above in more detail, then please do not hesitate to contact us on 0161 476 8276 or email hr@hallidays.co.uk. Or visit our LinkedIn page: www.linkedin.com/company/hallidays-hr/