New Requirement To Review & Consult On Tips Policies From October 2026

New requirements to review and consult on tips policies will build on changes to the tipping regime introduced in October 2024. The new measures are intended to strengthen fairness and accountability in the existing system, with a focus on worker participation and transparency. It is expected that the new requirements will be introduced in October 2026 once commencement regulations have been passed.

Current legal framework for tipping policies

Under the Employment (Allocation of Tips) Act 2023, which came into effect on 1 October 2024, it became mandatory for employers to pass 100% of tips, gratuities and service charges to workers in full.

Where qualifying tips are paid on a ‘more than occasional and exceptional basis’, employers are required to have a written policy on how they deal with tips.

A statutory Code of Practice (Code of Practice) provides guidance and encourages (but does not require) worker consultation.

Key changes under the Employment Rights Act 2025

Under the Employment Rights Act 2025 (ERA 2025) employers will need to:

• Consult workers before introducing a tipping policy. Consultation must be genuine, not just a paper exercise, and be with recognised trade union representatives, elected worker representatives, or with workers directly (if no representatives exist).
• Review their tipping policies at least once every three years (including conducting a fresh consultation with workers).
• Share an anonymised summary of consultation responses with staff.

If consultation requirements are not met, workers will be able to bring claims in the employment tribunal. Tribunals will be able to award compensation of up to £5,000 for financial loss sustained by the worker.

The government has published its response to a pubic consultation on the rules governing the allocation of tips on 29 June 2026.

Preparing for new requirements to review and consult on tips policies

The forthcoming requirements are not a wholesale rewrite of the tipping rules but they do represent an important shift. Instead of solely ensuring transparency, organisations should be looking towards actively involving workers in the

A draft updated Code of Practice has been laid before parliament and is subject to parliamentary approval. Employers who already have tipping policies in place should use the period before October 2026 to review whether those policies are clear, fair and supported by a meaningful consultation process. Employers need to be prepared to schedule regular three-year policy reviews and to document and share consultation outcomes.