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ARTICLE · 27 OCTOBER 2026

Tipping Law

Paris Smith LLP
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The Employment Rights Act 2025 introduces significant changes to tipping legislation in the UK, requiring employers to consult with workers when developing tipping policies and review them every three years. Workers will gain new rights to view consultation summaries and may claim compensation up to £5,000 for employer non-compliance, fundamentally reshaping how tips, gratuities, and service charges are managed in the workplace.

United KingdomEmployment and HR
Claire Merritt
Claire Merritt
Bryony Harnett
Bryony Harnett

What is tipping law?

The Employment (Allocation of Tips) Act 2023 properly came into force with a Statutory Code of Practice in October 2024.

The legislation requires that workers receive “tips, gratuities and service charges” (‘tips’) in full, and that they are allocated fairly and transparently. Fair distribution does not mean that employers are obliged to allocate the same proportion of tips to each worker. Payments of tips are to be paid in full no later than the end of the month following that in which the customer paid the tip.

If tips are paid on more than an occasional and exceptional basis, employees must have access to a written policy setting out how they are dealt with. They should also have access to records of tip allocation for a period of three years. Failure to comply with the duties may entitle workers to bring claims in the Employment Tribunal.

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