Millions of workers to be better off in pay packet after major rule change comes into force today
There's some good news for workers all over the nation as a huge rule change is being made today (1 October).
A new act means that an estimated two million workers will receive more money in their payslips to take home.
This change comes months after the UK government increased the minimum wage, though it is expected that this figure will increase come April 2025, with further details to be announced on 30 October this year.
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As well as this planned increase, it is well-known that they're also trying to get rid of age bands, with different minimum wage rates for those aged under 18, 18-20, and 21.
For those 21 and over, the minimum wage is increasing by £1.02 to £11.44 an hour and 18 to 20-year-olds are being given an increase of £1.11 to £8.60 per hour.
Greater employment protection for parents and unpaid carers has also been put in place, as well as greater redundancy protection for pregnant women and new parents, while a new entitlement to do with leave for unpaid carers that are caring for a dependant with a long-term need has been introduced as well.
But the good news keeps flying in, as this new act will be in favour of employees over employers.
In the past, businesses in hospitality did not have to follow a specific set of rules when it comes to tipping, meaning there was no law that stated that it must be passed to staff.
But from now on, it will be unlawful for employers to keep money that workers have earned either tips, gratuities, or service charges, meaning that staff will receive 100 percent of the tips they are given.
The hospitality, leisure, and services sectors will be affected most by this change, though other businesses that also allow tipping will also have to adhere to this act.
Several hospitality workers rely on tips to make up a chunk of their earnings, but are left helpless if their employers don't choose to pass service charges on to them, as employees would only really have control over tips if they were given them in cash.
This meant that tips paid by card were at the discretion of the employer, who can deduct card processing fees or other sums, affecting how much employees earned.
This move comes after some chains chose to increase the hourly pay rate of workers by a set amount, in spite of how much money was collected in tips.
Workers can now take a breath of relief, knowing that all of their earnings will be going to them, as it is also stated that tips must be paid within a month of being earned, like a regular payslip.
On top of this, employers will not be able to alter somebody's salary or rate as tips don't count to the minimum wage, though there are fears that restaurants that were using tips to help with staff wages will increase prices.
This act was proposed under David Cameron's government eight years ago and was meant to come into effect in July, but it was pushed back to October.
Workers will be able to view their employer's tipping policy and records now too, as per the new rules.
Employers must draft a written statutory Code of Practice, setting out how tips will be distributed in a fair and transparent way among workers.
Joshua Nair