Legal background
Before this Act, there was no law which directly concerned the distribution of tips as between employers and their workers.
	In terms of their initial legal ownership, prior to any allocation in accordance with this Act: tips and gratuities which are paid directly to the employer (for example sums paid by debit card, credit card or cheque) are the legal property of the employer. This is also the case for all service charges. Tips and gratuities which are paid in cash directly to a worker are the legal property of the worker, although is possible for employers to exercise control or significant influence over these tips through the worker’s terms of employment or by the employer giving instructions.
	In 2009, there was a change in the law to prevent employers from using tips so as to meet their National Minimum Wage obligations. The current position is set out in Regulation 10(m) of the National Minimum Wage Regulations 2015, which specifies that payments made by an employer in respect of tips paid by consumers do not form part of a worker’s remuneration for National Minimum Wage purposes.
	The methods of taxation for tips can vary depending on the way in which they are received. This Act does not interfere with the law concerning the taxation of tips.