Government sets timeline for new laws on tipping and zero-hours contracts

The government has revealed plans to tighten tipping laws and end the use of ‘exploitative’ zero-hours contracts over the next two years as part of its roadmap for the roll-out of the Employment Rights Bill.

April 2026 will see statutory sick pay extended to lower-paid workers from the first day of their illness and staff will be granted paternity and unpaid parental leave from day one on the job.

Tipping laws will be tightened from October 2026, with businesses mandated to consult with workers to ensure tips are distributed fairly.

Employers will also be obligated to protect their employees from harassment by third parties, including in public-facing roles such as bar work, from next year.

The government said it would end the “exploitative use of zero-hours contracts” in 2027 to provide workers with “stable hours and predictable income”.

There will also be a requirement for employers to show they have taken “all reasonable steps” to prevent sexual harassment of their team in 2027.

The Employment Rights Bill was first announced in 2024 as the “biggest improvement to workers’ rights for a generation”.

However, it has proved controversial with employers, who have raised concerns about costs to businesses.

While it was initially thought zero-hours contracts would be completely banned, workers including agency staff will instead be given the right to request a contract reflecting the number of hours they regularly work.

Staff who wish to remain on zero-hours contracts will still be given the flexibility to do so.

UKHospitality chief executive Kate Nicholls said: "Clear and precise timelines on when aspects of this legislation, and the processes to deliver them, will come into force is essential, and it was important that the government embark on providing clarity.

“There are substantial and expensive changes for businesses in the Employment Rights Bill and it’s right that the government is using the appropriate implementation periods for the most complex issues for hospitality, in order to get the details right for both businesses and workers.

“We have been clear with the government that the changes regarding guaranteed hours and predictability of shifts will be the most complex for hospitality businesses and therefore necessitates a significant implementation period. It’s important that it has acted on our concerns and it must now use this time to work with businesses on an appropriate policy framework and clear guidance.

“Businesses are understandably wary about the cost and complexity of the more immediate changes in the Employment Rights Bill, particularly alongside increases to National Insurance Contributions, employment costs and business rates.

“Hospitality businesses have absolutely no more capacity to absorb costs and the government must not increase the sector’s cost burden once again.”

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