Draft tipping code adds worker consultation and three-year records

The government has re-released its draft revised Code of Practice on the distribution of tips. The new rules are expected to take effect by the end of 2026.

The draft was first published, then withdrawn in July, weeks later and months before the rules were due to take effect in October. The re-released version is largely unchanged.

The biggest change for small venues is consultation. Current rules require employers to allocate tips fairly and keep a written policy, but not to involve staff in shaping it.

Under the draft Code, consulting workers becomes mandatory. Simon Bocca, founder and chief executive of payroll software platform PayCaptain, told Startups.co.uk that businesses will need "a written, consulted-on tipping policy".

Policies will also need periodic review. That means revisiting the policy at set intervals, involving workers each time, and keeping a documented trail.

Tipping records will have to be held for three years, according to Gillian Wright, co-founder of tronc management software JustTip, who listed the duty alongside running and recording a consultation and reviewing the policy on schedule.

Digital collection buys no exemption. Automatic service charges, card tips and QR-code tips at the table all fall within scope.

Bocca's point is that the method of collection is not the test. "Allocation rather than payment method determines whether it's in scope," he said. Existing digital tipping setups may need re-examining to see how the money is actually split.

The draft also pushes back on fixed shares agreed informally, such as a percentage for chefs settled verbally years ago. Employers are expected to justify the fairness of the scheme as a whole.

Back-of-house staff will need to be included in the tipping pool, not only workers who deal with customers face to face. The stated aim is to close off unexamined allocations that can expose a business to equal pay or indirect discrimination claims.

Nor does a tronc move the problem elsewhere. Wright said the liability only transfers if the arrangement is genuinely independent and well run, with the employer still checking in on it.

The consultation is run by the Department for Business and Trade and closes on 29 September 2026. Responses can be submitted through the government's online form, by email to tipping@businessandtrade.gov.uk, or by post.

For a small venue, the practical work starts before the Code is final: deciding how a worker consultation would actually be run, auditing how app and QR tips are currently divided, and writing down the reasoning behind any fixed share. Those are the three things the draft asks employers to be able to show.