Preparing for New Tipping Rules: What Employers Should Know

Another employment law change expected before the end of 2026 (with the implementation date still to be confirmed) will affect any business that receives tips, gratuities or service charges.

While the hospitality sector is likely to feel the biggest impact, the changes will also apply to many other businesses, including hairdressers, beauty salons and any employer where customers regularly leave tips.

Under the new requirements, employers will need to have a written tipping policy in place. This policy must be developed in consultation with employees and reviewed at least every three years to ensure it remains relevant and reflects how tips are managed within the business.

For many SMEs, this may be the first time they’ve needed to formally document what has previously been an informal process. Having a clear policy helps ensure employees understand how tips are collected, allocated and distributed, while promoting consistency and transparency.

What employers can do now

Although the implementation date has not yet been confirmed, it’s sensible to start preparing by:

  • Reviewing how tips, gratuities and service charges are currently managed.
  • Identifying whether any informal practices need to be documented.
  • Planning how you will consult with employees when developing your policy.
  • Considering how the policy will be communicated and kept under regular review.

For businesses where tipping forms an important part of employees’ earnings, taking time to establish a fair and transparent approach now will make it easier to comply when the new requirements come into force.

As with many of the employment law changes arriving over the next year, early preparation can help avoid last-minute pressure and give both employers and employees confidence that the right processes are in place.

Finally, a reminder that our next ‘Employment Law Update’ will take place on 19th November and we will be sharing more details shortly.

For more guidance or advice please contact one of our HR business partners at [email protected] or call 01484 680098

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