For years, tipping in hospitality has run on trust, and for temporary and agency staff, that trust was often misplaced. Anyone who has worked a shift, watched customers tip generously, and later wondered where that money actually went will recognise the problem. As of 2024, the law has changed. This article sets out what the system used to look like, what has changed, and what it now means in practice for agency workers on their next shift.
Before: A System Built on Guesswork
For those who have worked hospitality shifts through an agency, much of the old system will sound familiar.
Tips often stayed with the business rather than reaching the worker who earned them. There was no legal requirement for employers to pass on the full value of a tip to staff, and some venues kept a portion to cover administration, card processing fees, or breakages, with little a worker could do in response.
Agency and temporary staff were frequently left out of tipping arrangements altogether. Tronc schemes and tip-sharing systems were typically built around permanent staff rosters, meaning a temp working a single shift might not be included at all, even when they had worked the same floor, served the same tables, and been tipped by the same customers as everyone else on shift.
There was also little transparency in how tips were handled. Workers had no legal right to see how tips were calculated, pooled, or distributed, so if a worker suspected they had been shorted, there was no formal way to check, let alone challenge it.
And crucially, there was no meaningful recourse. Even where something looked wrong, there was no dedicated legal mechanism to enforce fair tipping. In practice, it came down to whatever goodwill existed between the worker and the venue.
The scale of the problem was significant. Government estimates suggested that around £200 million a year in tips was not reliably reaching the more than two million UK workers who had earned it, with agency and casual staff among those most exposed to being overlooked.
Now: The Employment (Allocation of Tips) Act 2023
The Employment (Allocation of Tips) Act 2023 received Royal Assent in May 2023 and came into force during 2024, fundamentally changing the rules around tipping, including specifically for agency workers.
Under the Act, the entirety of a tip must now go to workers. Employers can no longer retain any portion of a tip for themselves. The only lawful deduction is tax; nothing may be withheld for administration, processing costs, or any other business expense.
Tips must also be paid out promptly. Employers are required to pay all eligible tips by the end of the month following the month in which the tip was received, ending the practice of indefinite delay.
Perhaps most significantly for agency staff, the Act explicitly brings them into scope. It covers workers rather than only permanent employees, meaning part-time, casual, zero-hours, and agency staff are all included, provided the employer or agency has control or significant influence over how the tips are handled. Anyone doing the work that generates a tip is meant to share in it on the same basis as the permanent team around them.
The scope of the Act extends well beyond restaurants and bars. It applies broadly across hospitality, leisure, and service sectors, including beauty, wellness, travel, and visitor attractions, so most workers placed into tipped roles are likely to be covered.
The Act also introduces new administrative obligations on employers. Businesses must now maintain a written tipping policy and share it with all workers, including agency staff, rather than only permanent employees. They must keep detailed records of tips received and how they were allocated, and workers are entitled to request that information. Where a tronc, an independent tip-pooling system, is used, it must operate fairly, and agency workers must not be put at a disadvantage compared with permanent staff simply because of their employment status.
Compliance is not optional. Businesses that fail to meet their obligations under the Act can face claims in the Employment Tribunal, giving workers a genuine legal route to challenge unfair treatment rather than relying on informal goodwill.
What This Means in Practice
For those working hospitality shifts through an agency, the Act establishes a clear set of entitlements. Workers can now ask to see a venue's written tipping policy. They are entitled to their full share of tips, distributed on the same footing as permanent staff doing equivalent work. They should be paid within a defined timeframe rather than an indeterminate one, and they have the right to seek transparency if they wish to query how a tip pool was calculated or split.
Where something does not add up, workers now have legal standing to raise it, first with the venue directly, and if necessary, through formal channels beyond it.
Where We Come In
As an agency, our responsibility does not end at placing workers into shifts. Part of our role is ensuring the venues we work with are meeting their obligations under this legislation. We check that tipping policies exist, that agency staff are properly included in tronc arrangements on fair terms, and that our workers receive what they are legally owed. The uncertainty that once surrounded tips on a shift should no longer be part of the job, and we are committed to making sure it isn't.