Businesses have been banned from withholding tips or service charges from their staff under new rules that came into force on 1 October.

All tips, whether in cash or by card, must now be shared between workers by law in Britain, with millions of workers such as those working for cafes, pubs, restaurants, taxi companies and hairdressers most likely to benefit.

If an employer breaks the law and retains tips, a worker will be able to bring a claim to an employment tribunal.

The law means tips must be passed to employees by the end of the following month from when they were received.

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.

Minister for Employment Rights Justin Madders said:  

‘When you tip someone for good service, you expect them to keep all their tip. They did the work - they deserve the reward.

‘This is just the first step of many in protecting workers and placing them at the heart of our economy. We will be introducing further measures on tipping to ensure workers get their fair share of tips.

‘Britain’s outdated employment laws require an urgent update. This Government will ensure they are fit for the modern economy and deliver on our plan to Make Work Pay.’