Home / Tipping the balance: the Tipping Act – one year on
1st October 2025
Jake McManus, Solicitor
1 October 2025 marks the one-year anniversary of the introduction of the new law regarding the allocation of tips, otherwise known as the ‘Tipping Act’. The law regulates how employers allocate tips among their workforce by introducing obligations to pay staff their tips, gratuities and services charges in full without deductions. Businesses are also obliged to ensure that tips are allocated amongst staff in a fair, transparent way and to have in place a written policy where tips are commonly given to staff. An employee will be entitled to bring claims at the Employment Tribunal where their employer has failed to comply with its legal obligations, including where the employer has failed to fairly allocate tips in line with the Tipping Act or where deductions have been made to tips paid to staff.
We have previously written articles describing the new legal obligations for employers and the implications of non-compliance, which you can read again here and what steps employers may want to take to prepare for the Tipping Act, which you can remind yourself of here.
One of the requirements of employers is to have in place a written tips policy where any tips, gratuities and service charges are paid on “more than an occasional and exceptional basis”. Whilst the legislation does not define what is meant by “more than an occasional and exceptional basis”, it is likely to be a low threshold and in reality, will apply to the overwhelming majority of customer-facing businesses operating within the hospitality sector given that receiving tips from customers is standard practice in the industry. Businesses who are required to have in place a tips policy must ensure that it is available to all workers and up to date.
The legislation requires the Tips policy to include specific information to ensure that it is compliant, particularly in relation to the type of tips covered by this law, how and on what basis the business will allocate tips amongst staff and record keeping procedures.
The Kuits employment team have been advising on and producing Tips Policies for businesses within the hospitality sector during the last 12 months. We strongly encourage employers who regularly receive tips to contact us to ensure that their practices are compliant with the law and that they have in place a Tips policy that is sufficient for legal compliance and business protection purposes, not least because a business cannot be said to have met its obligation to handle tips fairly and transparently without an effective, written policy. The Kuits Employment team can provide a policy bespoke to your business which reflects the ways in which your business operates whilst ensuring compliance with the Tipping Act.
If you would like assistance or if you have any questions regarding the above, please contact Jake McManus on 0161 912 6151 or email jake.mcmanus@kuits.com.