The Government is consulting on further changes to the law on tipping, following reforms that came into force in 2024. The proposals focus on whether it should be required to consult workers when setting or changing tipping policies.
These proposals sit alongside the Employment (Allocation of Tips) Act 2023, which became fully effective in October 2024. That legislation introduced new legal requirements designed to ensure that tips, gratuities and service charges are passed on fairly to workers. Tips and Tronc must be allocated in full to staff, without deductions, and within a reasonable timeframe. A business must also have a clear written policy explaining how tips are distributed that employees are given prior to starting work and keep records so workers can see how allocations have been made.
While these changes represented a significant step forward, the Government’s view is that the law does not yet go far enough. In particular, there is currently no obligation to involve workers when deciding how tipping arrangements are structured. As a result, policies can still be designed and amended without meaningful input from the people whose pay is most directly affected.
The Make Work Pay: Strengthening the Law on Tipping proposal is to introduce a requirement to consult workers, or their representatives, when creating or reviewing tipping policies. The intention is to strengthen transparency and fairness by ensuring that workers have a voice in decisions about how tips and service charges are shared.
From the Government’s perspective, consultation could help prevent disputes and misunderstandings by making tipping arrangements clearer and more representative of workplace realities. It could also help ensure that tipping policies are perceived as fair, particularly in sectors such as hospitality, leisure and personal services, where tips can make up a meaningful proportion of earnings.
For workers, the proposals are intended to provide greater influence over how tipping systems operate in practice. Being consulted on policy design may help address concerns about uneven distribution, pooled tips, or the treatment of service charges added to customer bills. The Government argues that this could improve trust and workplace relations, particularly in lower-paid sectors where workers may otherwise have limited bargaining power.
At this stage, no decisions have been made. The consultation invites responses from workers, employers, trade unions and other interested parties, after which the Government will consider whether legislative changes are necessary. If the proposals are taken forward, they would represent a further shift towards greater transparency and worker involvement in how pay-related arrangements are managed.
