New legislation makes it unlawful for service industry employers to withhold tips from their staff.
It means millions of UK workers will take home an estimated £200 million more as a share of the tips received by companies.
The Government has introduced the Code of Practice on the fair and transparent distribution of tips that will have legal effect under the Employment (Allocation of Tips) Act.
The measures are expected to come into force on 1 October, once they have been approved by Parliament.
The updated Code of Practice will be statutory and have legal effect, meaning it can be introduced as evidence in an employment tribunal.
Workers will be able to view an employer’s tipping policy, their tipping records and will be able to use the Code as evidence in an employment tribunal.
Coupled with secondary legislation, the Act makes it unlawful for businesses to hold back service charges from their employees.
Business and Trade Minister Kevin Hollinrake said: “It is not right for employers to withhold tips from their hard-working employees.
“Whether employees are cutting hair or pulling a pint, this Government’s legislation will protect the tips of workers and give consumers confidence that when they leave a tip, it goes to the hardworking members of staff.
“The secondary legislation reinforces our commitment to legally protecting our low paid workers and ensuring a fair day’s pay for a fair day’s work.”
