Guides / The written tips policy

The written tips policy: what the law says it must cover

If tips are paid at your venue on more than an occasional and exceptional basis, the law requires a written policy on how they are dealt with, available to every worker (ERA 1996, §27I(1), inserted by the Tips Act 2023). Most hospitality venues are over that threshold on a quiet Tuesday. Here is what the policy must contain, who must be able to see it, and what is about to be added.

What the policy must contain

The Act sets two mandatory contents:

Point (b) is the substance: the policy has to say how the split actually works. The Code of Practice lists the factors an allocation may legitimately turn on, including type of role, hours worked during the period, seniority, length of service, and customer intention (Code §23). A policy that names its factors and how they combine is one a worker can check; that is the standard to write to.

Who must be able to see it

That includes agency staff. The Code requires agency workers to be aware of the written policy and have access to it (Code §18), and the Act itself brings eligible agency workers inside the regime (§27H). If you amend the policy, the amended version must be made available to all workers too (§27I(6)).

Consultation: good practice now, law from October 2026

Today the Code frames consultation as strong guidance:

With a sharp caveat: “Staff support and agreement with a method of distribution needs to be genuine and not coerced by managers or employers” (Code §27).

Section 14 of the Employment Rights Act 2025, expected in force October 2026, turns this into statute. Before producing the first version of a policy, employers will have to consult trade-union or elected worker representatives, or the affected workers directly where no representatives exist (new §27I(2A)). The policy must then be reviewed at least every three years, with consultation as part of every review, and the three-year clock runs from the day the first policy was made available even where that predates the change (new §27I(3A)–(3C)). A summary of the views expressed in any consultation must be made available to all workers, anonymised (new §27I(7)).

What happens if you don’t have one

A worker can take a policy or records failure to an employment tribunal within three months (§27N). The tribunal can order compliance and award up to £5,000 per complainant for financial loss (§27O). The quieter cost is the one the Code is aimed at: without a written method, every disagreement about the split is your word against the room’s.

What good looks like

• Says whether tipping is required or encouraged, per §27I(2)(a).
• Names how tips are collected (cash, card, service charge) and confirms they are passed on in full.
• Says who is eligible, including agency and zero-hours staff.
• States the allocation method and its factors plainly enough for a worker to check their own share.
• Says when tips are paid out, inside the statutory end-of-following- month deadline (§27G).
• If a tronc runs the split, names the arrangement and who operates it. See the tronc guide for what independence requires.

FairTIP generates this policy from your venue’s actual setup, so the method on paper and the method in use cannot drift apart, and publishes it at a public link every worker can reach. The wider duties around the policy are covered in the Tips Act guide.