The new Employment Rights Bill is set to strengthen the tipping legislation that came into force in October 2024 and is part of the Labour government’s Plan to Make Work Pay pledge.
In this pledge, they promised to ‘strengthen the law to ensure hospitality workers receive their tips in full and workers decide how tips are allocated.’
This month, the roadmap for the Employment Rights Bill was announced, and, as promised, the tightening of the rules around tipping was included, this time with a date for implementation of October 2026.
What the Bill means for your tipping policy
Back in October 2024, the Employment (Allocation of Tips) Act 2023 introduced the Code of Practice on fair and transparent distribution of tips. If you’re already dealing with qualifying tips, gratuities and service charges on more than an occasional basis, you’ll know you need that written policy.
The Employment Rights Bill is adding some important new requirements that will make your tipping practices even more collaborative and transparent.
The new consultation requirements
The legislation already stipulates that you must have a clear and transparent written tips policy, and consultation with staff is encouraged. The amendment, as part of the Employment Rights Bill ,will now state that before you create your first version of a written tipping policy, you’ll need to consult with:
- Recognised trade union representatives, or
- Worker representatives of staff who’ll be affected by the policy, or
- Workers directly if there are no unions or worker representatives
This isn’t just a box-ticking exercise – it’s about ensuring your team has a real say in how tips are allocated.
The three-year review cycle
Another key change is that every three years, you’ll need to review your tipping policy. This review cycle starts from when you first implemented your policy, and each time you review it, you’ll need to go through the same consultation process.
Transparency is key
One of the most important new requirements is that you must provide all staff with an anonymised summary of the feedback you received during consultation. This summary needs to be available at the business location where the tips policy is implemented.
What does this mean for you right now?
If you introduced a new tipping policy after the October 2024 changes, you’ll want to schedule your first review for no later than three years from implementation (likely 2027). Remember to build in time for that consultation process.
The existing Code of Practice already recommends regular reviews, so this three-year cycle actually provides helpful clarity about expectations. And the consultation requirement? Well, the Code already suggests consulting employees and getting broad agreement – the Employment Rights Bill just adds more structure to make sure it happens properly.
Getting ready for October 2026
The government will consult on these tipping measures in winter 2025 or early 2026, giving you time to prepare. But it’s worth noting that these changes fit with Labour’s broader approach to workplace collaboration – they’re about formalising good practice rather than relying on employer goodwill.
The statutory Code of Practice will likely need updating when these changes come in, and you can expect further guidance to help with compliance.
Why this matters?
Remember, the Code of Practice has statutory status, which means employment tribunals must take its recommendations into account if complaints are made. Getting your consultation process right isn’t just about compliance – it’s about creating a fair, transparent approach that your team genuinely supports.
Need help with your tipping policy?
Whether you’re preparing for the October 2026 changes or need to review your current policy, Tips and Troncs can help. Our consultancy service includes employee consultation surveys, feedback analysis, and policy development that meets both current requirements and the upcoming Employment Rights Bill changes.
Don’t wait until 2026 to get your tipping policy right. Start planning now, and ensure your approach is both compliant and genuinely collaborative.