Committee publication · Correspondence · 7 July 2026
Letter from the Minister for Employment Rights and Consumer Protection relating to code of practice on distribution of tips, 29 June 2026
From: Business and Trade Committee
Inquiry: Employment rights
Summary
Kate Dearden, Minister for Employment Rights and Consumer Protection, informs the Business and Trade Committee that the government will lay a draft revised statutory Code of Practice on fair and transparent distribution of tips before Parliament. The updated Code reflects provisions from the Employment Rights Act 2025 and clarifies employer obligations to allocate tips fairly, pay 100% to workers without deductions, and distribute payments by month-end.
Key findings
- Government will lay draft revised Code of Practice on tips distribution before Parliament this week, updating the October 2024 version
- Revised Code reflects provisions from Employment Rights Act 2025 and updates guidance on fair allocation of tips to workers
- Employers must allocate tips fairly across all workers including agency staff, cannot use tips for wages or make unauthorised deductions
- Tips must be paid by end of month following receipt; framework ensures 100% pass-through to workers without unauthorised deductions
Tone
ProceduralTopics
employment-rightsworker-protectionwage-regulationtips-gratuities
Key actors
Kate Dearden MP, Liam Byrne MP, Department for Business and Trade, Business and Trade Committee
Notable line
“Employers must allocate tips fairly across workers (including relevant workers such as agency staff) • Employers cannot use tips …”
Key Quotes
“… the Government is committed to ensuring that workers re- ceive tips fairly and transparently.”
“Employers must allocate tips fairly across workers (including relevant workers such as agency staff) • Employers cannot use tips to make up wages or make unauthorised deductions • Tips must be paid …”
“Tips must be paid by the end of the month following the month in which they are re- ceived These measures will …”
Source · parliament.uk record ↗