Food, Drink & Hospitality Food, hospitality and tourism

Employment law for hospitality businesses

Tips and service charge distribution, DBS checks for staff working with children, workplace pensions, and employment law considerations specific to hospitality sector employers.

UK-wide
Guide summary

You must fairly share tips and service charges among workers, follow workplace pension rules, and make reasonable adjustments for disabled customers. Check staff who work with children need DBS checks. Keep records and follow deadlines to stay compliant.

  • Fairly share all tips among workers by the end of next month
  • No deductions from tips except tax and National Insurance
  • Keep tipping records for 3 years
  • Auto-enrol eligible workers into a workplace pension (3% employer, 5% employee)
  • Consider DBS checks for staff working with children (£52-£61)
  • Make reasonable adjustments for disabled customers
  • Train staff on disability awareness
  • Have a written tipping policy
  • Respond to tip information requests within 28 days
  • Declare pension compliance to The Pensions Regulator
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Employment law in hospitality

The hospitality sector has some of the most complex employment considerations of any UK industry, with specific regulations around tips, safeguarding, pensions and working patterns.

All standard employment law applies (contracts, National Minimum Wage, holiday pay, etc.), but this guide focuses on the hospitality-specific requirements and considerations.

Fair distribution of tips and service charges

Since October 2024, strict rules govern how tips, gratuities and service charges must be distributed to workers.

Workplace pension obligations

Despite high staff turnover, hospitality employers must operate a workplace pension scheme and auto-enrol eligible workers.

Safeguarding and DBS checks

Family hotels, venues with children's facilities, and hospitality businesses where staff have unsupervised contact with children should consider enhanced DBS checks.

Equality Act and reasonable adjustments

Hospitality businesses must not discriminate against disabled customers and must make reasonable adjustments to premises, policies and services.

Managing hospitality workforce challenges

High turnover and recruitment costs

The hospitality sector has significantly higher staff turnover than other industries (52% annually). This creates constant recruitment and training costs. Consider:

  • Structured induction programmes to reduce early leavers
  • Career progression pathways to retain good staff
  • Competitive pay above minimum wage to attract candidates
  • Flexible working arrangements where possible

Variable hours and zero-hours contracts

Many hospitality roles involve variable hours due to fluctuating demand. If you use zero-hours contracts:

  • Clearly communicate that hours are not guaranteed
  • Do not include exclusivity clauses (these are unenforceable)
  • Calculate holiday entitlement based on hours actually worked
  • Remember workers still qualify for workplace pensions if they meet earnings thresholds

Young workers and licensing implications

You can employ 16-17 year olds in licensed premises. Under section 153 of the Licensing Act 2003, any sale of alcohol by someone under 18 must be specifically approved by a responsible person (such as the premises licence holder or DPS) for each sale, and 16-17 year olds may serve alcohol with a table meal in a part of the premises used for table meals. Under-18s working in hospitality must not:

  • Work more than 8 hours per day or 40 hours per week
  • Work between 10pm and 6am - although a hospitality exception allows work until midnight subject to conditions (no work between midnight and 4am, adequate supervision, and compensatory rest)
  • Work without a 30-minute break after 4.5 hours

Right to work and immigration

Hospitality relies significantly on migrant workers. You must conduct right to work checks on all employees before they start.