Introduced through a private members’ bill last year, the Employment (Allocation of Tips) Act 2023 and the statutory code of practice on fair and transparent distribution of tips came into force today.

These changes will require employers to pass all tips, gratuities, and service charges on to workers, without deductions.

From today, if an employer breaks the law and retains tips, a worker will be able to bring a claim to an employment tribunal.

Employers in the wrong could be made to pay fines or compensation to staff, with workers able to hold bosses fully accountable through employment tribunals.

The Department for Business and Trade estimates that today’s changes will mean around £200 million will be received by workers that would otherwise have been retained by employers.

Employment rights minister Justin Madders said: “When you tip someone for good service, you expect them to keep all their tip. They did the work – they deserve the reward.

“This is just the first step of many in protecting workers and placing them at the heart of our economy. We will be introducing further measures on tipping to ensure workers get their fair share of tips.

“Britain’s outdated employment laws require an urgent update. This government will ensure they are fit for the modern economy and deliver on our plan to Make Work Pay.”