Dean Russell MP: Tipping bill should not be ‘burdensome’ for hospitality

Dean Russell, the MP behind a bill to change the law around tipping, has reassured hospitality operators that “everyone wants to get this right for businesses”.

The Employment (Allocation of Tips) Bill, which received Royal Assent on Tuesday 2 May, will make it illegal for businesses to hold back service charges from employees.

It was first proposed to Parliament in June 2021 and later progressed as a private members’ bill through the House of Lords.

The bill is now expected to come into force in 2024, following a consultation and secondary legislation.

Speaking to The Caterer, the Conservative MP for Watford said: “My goal has been to make sure that this isn’t burdensome or creates red tape, but ultimately enables fairness for everybody involved.”

Russell said he realised during the pandemic there was a greater need to protect staff access to service charge, as restaurants and bars stopped accepting cash and tips became ‘invisible’ due to the surge in credit card transactions.

“Many places just weren’t taking cash and at every table nearby you would hear that same question, which is: will this tip go to the staff?” he added.

“When I started digging deeper, it became really obvious that it isn’t a massive problem with every organisation, but that the businesses who keep the tips and use them as a form of profit undercut the businesses who are doing the right thing.”

The government has estimated the bill will see hospitality operators shoulder roughly £140m in additional costs, but Russell stressed “it’s not so much the implementation that is the cost” as “most businesses and the vast majority already give 100% of tips to staff”.

He added: “The ones who are really taking a lot from workers will notice a difference, but that’s because they’ve been taking money out of workers’ pockets. They shouldn’t have been doing that in the first place.”

The bill has also been designed to prevent the abuse of tronc systems.

Customers who hand cash directly to a waiter or waitress will not be affected by the bill, as it aims to avoid being “too explicit” and to overcomplicate “people practising fair tipping processes”, Russell said.

The bill will also require hospitality operators to pay agency workers tips at the same level as directly employed staff.

Russell said: “If somebody has been working in a team and given a tip by the customers for that, it felt that it was only fair that they would be under the umbrella of this bill.”

More details on the bill will be set out following the launch of a code of practice, which will be subject to a consultation to give businesses an opportunity “to feed in and share their views”.

The government is currently in talks with industry trade bodies, including UKHospitality, to develop this document.

Russell said: “That process [code of practice] will be really valuable and once that starts I know I’ll be doing everything to promote it and I’m sure the government will as well.”

Find out how the Employment (Allocation of Tips) Bill will impact your business in this report from The Caterer's tipping summit.

Image: Kamil Macniak/Shutterstock