Letter Confirming Allocation of Tips Policy

On 1 October 2024, the Employment (Allocation of Tips) Act 2023 (the Tips Act) comes into effect. 

Under this new legislation, employers are required fairly to allocate ‘qualifying tips’ to workers, including agency workers. ‘Qualifying tips’ include tips, gratuities and service charges which are either employer-received, or worker-received but subject to employer control. 

The Tips Act places weight on the employer’s duty to be transparent when it comes to tips and how they are allocated and distributed. To ensure transparency, the Code of Practice states that employers will be required to consult with workers to seek a broad agreement that the allocation of tips is fair, reasonable and clear.  A letter seeking agreement to a proposed allocation of tips policy can be found here.  This Letter Confirming Allocation of Tips Policy should be used to confirm the Company’s policy on the fair allocation of tips when staff feedback on the draft policy has been considered.  A copy of the Fair Allocation of Tips Policy should be enclosed with the letter.

This Letter Confirming Allocation of Tips Policy advises workers that the Fair Allocation of Tips Policy will be regularly reviewed to ensure that it continues to be fair.

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