The UK hospitality sector is a major economic driver, contributing over £93 billion in direct Gross Value Added to the economy annually and supporting roughly 3.5 million jobs directly. The benefits of working in the hospitality sector are usually characterized by more flexible hours, increased availability for part-time work, and of course, the tips.
Whether it’s a pub, bar, restaurant, or café, tips are often that added incentive that keeps the staff wearing a smile, so it’s no surprise that tipping laws have been updated in recent years, with reforms aiming to protect this valuable cash benefit.
Recent Changes to Tipping Laws
The regulations on tipping have been firmly bolstered in the last few years, with the Employment (Allocation of Tips) Act 2023 being the precursor to the latest changes.
The 2023 Act, which came into effect on 1 October 2024, meant that employees were entitled to keep 100% of their tips, gratuities, and service changes without any deductions being made with employers who do not comply being subject to penalties and possible Employment Tribunal claims.
The latest changes to tipping law have come as a result of the Employment Rights Act 2025 (The Act), the biggest legislation change to employment rights this century. The changes to tipping law require that from October 2026, employers will need to consult with workers or their representatives before creating a tipping policy, as well as ensuring that policy is updated every three years.
Consulting with an expert is the best way to ensure you and your business stay compliant throughout the mass changes that are due because of The Act, get in touch with Laytons ETL today and simplify your journey to compliance.
Further Changes You Need to Be Aware of
The Act has offered up a very substantial number of changes to employment laws, being the biggest change of its kind since the 1996 Act of the same name. There are a lot of changes for employers to get to grips with over the next two years and through our regular seminars, webinars and articles we will continue to update clients and contacts of these, if you would like to receive these updates, please fill out the below form
For specific legal advice and questions don’t hesitate to get in touch with our expert Employment Law Team today for comprehensive answers to any questions you may have.
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Disclaimer: This publication is provided by Laytons LLP for informational purposes only. The information contained in this publication should not be construed as legal advice. Any questions or further information regarding the matters discussed in this publication can be directed to your regular contact at Laytons LLP or Laytons’ Employment team.
