New legislation has been enacted that mandates 100% of tips received by businesses must be shared with employees, effective immediately.

Justin Madders, the minister for employment rights, describes this law as the first step in a series of measures designed to enhance protections for workers' rights regarding tips.

The Department for Business and Trade estimates that this new law will enable workers to collectively receive an additional £200 million.

Andrew Tighe from the British Beer and Pub Association (BBPA) emphasizes that the new framework will foster consistency and transparency in tip distribution across all sectors.

The law impacts various sectors, including restaurants, pubs, hairdressers, and taxi services, ensuring that tips are distributed fairly among staff.

Employers are required to pass tips to employees by the end of the month following their receipt, and agency workers are also entitled to receive tips under this law.

In cases where employers fail to distribute tips appropriately, employees have the right to file claims against them in employment tribunals.

Unite's general secretary, Sharon Graham, highlights that this legislation empowers workers to challenge unfair practices related to tip deductions.

While Kate Nicholls, chief executive of UKHospitality, supports the changes, she warns that they may impose additional administrative burdens and costs on struggling businesses.

This new law comes after eight years of discussions, largely driven by criticism of tipping policies in various companies, particularly within the casual dining sector.