A payroll manager at a multi-site restaurant group is drafting a staff consultation plan this week, chasing a deadline nobody can pin to an exact date. New tipping rules under the UK's Employment Rights Act 2025 require employers to talk to workers before finalising how tips get shared, and the change is due to land this month. Regulators have confirmed only the month of commencement, not the day. For groups already running a policy under the 2023 Tipping Act, this adds a procedural step with real consequences if skipped.
What the new tipping rules change
The starting point is already familiar to most operators. The Tipping Act makes it mandatory for all tips, service charges and gratuities that businesses have 'control or significant influence' over to be passed on to workers, without deductions. That law took effect on 1 October 2024 and gave staff a right to a written policy and to inspect tipping records.
The 2026 update does not touch how the money gets split. Instead, it reflects additional employer obligations introduced by Section 14 of the Employment Rights Act 2025. The most significant change is the introduction of a requirement for employers to consult workers when developing or reviewing a written tipping policy. Under the revised Code, employers must review their written tipping policy at least once every three years, consult workers whenever the policy is developed or reviewed, and make an anonymised summary of the consultation responses available to workers at the relevant place of business.
Ticking a box will not be enough. The revised Code makes clear that consultation must be genuine, conducted in good faith and proportionate to the size and nature of the business, and workers should be given an opportunity to participate and provide meaningful feedback before decisions are made.
Who the consultation duty affects
The duty is written broadly on purpose. The government has recognised that there is no single fair model for distributing tips, since a distribution system that works for a small independent restaurant may not work for a national hotel group, a salon chain, a delivery platform or a multi-site leisure business. Any employer already required to hold a written tipping policy falls under the new consultation rule too.
That base requirement is not new. Where tips are paid on more than an occasional and exceptional basis, employers are required to have a written tipping policy setting out how tips are dealt with in the business and maintain tipping records for a period of three years, which workers have the right to request access to. Agency staff count as well: the obligation to allocate tips fairly extends to agency workers, meaning employers must consider their inclusion when distributing qualifying tips, though self-employed contractors are not entitled to tips.
On who does the consulting, the Code gives a clear order of preference. Consultation should take place through recognised trade union representatives or other worker representatives where they exist, and where no representatives are in place, employers should consult workers directly. For a restaurant group with sites in several cities, that can mean running the same conversation many times over, with different staff groups reaching different conclusions.
What the figures show
The sums involved are not small change for the sector. The UK hospitality sector contributes over £93 billion in direct Gross Value Added to the economy annually and supports roughly 3.5 million jobs directly. A policy change touching how tips move through that workforce reaches a large share of the people serving food and drink every day.
The process behind the rule also shows its scale. The new measures were the subject of a consultation between February and April 2026, which asked for the views of employers and their representatives, workers and their representatives, consumers and the wider public. The underlying principle has not moved since 2024: tips must be shared fairly between the workers involved in providing service to customers and must be passed on in full to those workers by the following month in which the tips are received.
What comes next
The government has committed to a timeline, if not a date. It intends to publish a full response and an updated statutory Code of Practice later in 2026, and it is expected that the new legal requirements and updated Code will come into effect in October 2026. Several employment law firms tracking the file give the same caveat: the changes are expected to come into force in October 2026, although the exact timings are unknown.
That gap between "expected" and "confirmed" leaves restaurant groups preparing against a moving target. The revised Code is expected to come into force in October 2026, subject to parliamentary approval. Lawyers advising operators have been direct about the practical response: employers should use the lead-in period to review their existing tipping policies and prepare for the new legal obligations. Until Parliament signs off on the final text, the question hanging over every multi-site restaurant group is not whether the consultation duty arrives this month, but on which exact day it does.
Learn more about tipping rules
- Top tips to get ahead of the upcoming tipping changes
- Hospitality Tipping Law Update: New Employer Duties from October 2026
- Changes to Tipping Laws 2026
