27 July 2026
The Government has published its response to the consultation on strengthening the law on tipping, alongside a revised draft Statutory Code of Practice on Fair and Transparent Distribution of Tips. The changes are expected to take effect from October 2026, subject to parliamentary approval.
The reforms build on the protections introduced by the Employment (Allocation of Tips) Act 2023, which requires employers to pass qualifying tips, gratuities and service charges to all workers in full and distribute them fairly and transparently.
Under the new changes, employers will be required to consult workers before introducing or making significant changes to their tipping policy. Workers should then have an opportunity to provide feedback before policies are implemented or amended. Whilst employers will not be required to obtain agreement from workers, they will be expected to genuinely consider any views expressed during this consultation process.
Employers will also be required to review their tipping policy at least once every three years to ensure it remains fair, transparent and reflective of workplace practices. The revised draft Code of Practice has been updated to reflect these requirements.
This revised draft Code provides further details on what employers will be expected to do.
Employers should explain:
- how tips are collected
- how they are distributed
- any factors used when allocating tips
- and proposed changes to tipping arrangements.
The draft Code also emphasises that any consultation should be meaningful and proportionate to the size and structure of a business. The Government believes greater transparency will improve confidence in workplace tipping arrangements and help reduce disputes.
With implementation expected in October 2026, employers operating where tipping is common may wish to begin reviewing their arrangements now.
This could include:
- reviewing existing tipping policies
- establishing a process for consulting workers on the tipping arrangement
- introducing a regular policy review cycle
- assigning clear responsibility for tip allocation and policy reviews
- ensuring records remain accurate and up to date.
The Department for Business and Trade (DBT) has indicated that amendments to the non-statutory guidance will be published to support employers ahead of implementation.
The CIPP Policy team will continue to monitor developments and provide updates ahead of the expected October 2026 implementation date.
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.
