Restaurants, pubs and bars will be required by law to ensure all tips go to staff from today under new rules that have come into force.
Businesses will be banned from withholding money added as a service charge and must share the cash between workers by law.
If an employer breaks the law and retains tips, a worker will be able to bring a claim to an employment tribunal.
The law comes into force eight years after a government report first suggested the policy. It means tips must be passed to employees by the end of the following month from when they were received.
In 2021, the UK government said 80 per cent of all tipping was taking place with a card, suggesting it had become easier for businesses to keep the money.
The Department for Business and Trade has predicted the new law will mean a further £200 million will be received by workers rather than their employers.
“The people working in hospitality are the lifeblood of our sector and these changes rightly ensure tips hard-earned through excellent service will end up entirely in their pockets,” said Katie Nicholls, chief executive of trade body UK Hospitality.
But she claimed the policy was “another example of costs being placed on a sector that can least afford it”.
“New rules naturally come with an administrative burden and businesses will see some additional cost as they work through them in practice.”
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