Employment law changes: What hospitality employers need to know

Recent changes to UK Government employment law are creating new challenges for hospitality employers, particularly around working hours, tips, and managing staff conduct. There is now a greater focus on how these issues are handled day-to-day, not just whether the right policies are in place.

With many employers continuing to face Employment Practices Liability (EPL) claims and late notification potentially affecting cover, understanding your responsibility as a hospitality employer has never mattered more.  

A recap of the key UK employment law changes

Changes introduced in April 2026 bring new responsibilities for employers, particularly around pay, leave and record-keeping:

• Statutory Sick Pay (SSP) is now payable from day one, with no minimum earnings threshold
• Day one family leave rights now include paternity leave and unpaid parental leave
• Bereaved partner’s paternity leave introduces new entitlement following the death of a child’s mother or primary adopter
• Stronger penalties now apply where collective redundancy consultation rules are not followed
• Whistleblowing protections have been strengthened, particularly around harassment
• A new ‘Fair Work Agency’ will support enforcement of worker rights
• Holiday pay records must be clear, compliant, and kept for six years
• Larger employers (250+ staff) are encouraged to publish action plans on gender pay gaps and menopause support

Changes to unfair dismissal protections will come into effect on 1 January 2027. While there’s time before these rules apply, reviewing your policies now can help avoid disruption later. 

Recent UK employment law changes are still shaping hospitality – what employers need to consider

Several important reforms introduced since April 2024 remain highly relevant for hospitality employers.

• Day one rights (April 2024): Employees can now request flexible working from their first day and take unpaid carer’s leave. If these requests aren’t handled well, they can quickly lead to formal complaints or grievances.
• Predictable working patterns (April 2024): Workers on variable hours can ask for more predictable schedules. This is significant for rota-based and seasonal teams.
• Tips and service charges (October 2024): All tips and service charges must be passed onto staff in full and supported by a clear, written policy.
• Duty to prevent sexual harassment (October 2024): Employers are now expected to take proactive steps to prevent sexual harassment. Failure to do so could result in employment tribunal awards increasing by up to 25%.

For hospitality businesses, these changes together are especially important as they may reduce flexibility while increasing admin and cost pressures.

Why employment disputes are becoming more likely

Taken together, these changes make it more likely that:

• Everyday concerns can escalate into formal grievances
• Discrimination or harassment claims arise
• Disputes linked to working patterns or pay emerge
• Customer behaviour leads to employer liability

The introduction of the ‘Fair Work Agency’ also signals a shift towards more active enforcement, with greater powers to investigate employers and intervene where needed.

Why Employment Practices Liability (EPL) insurance matters

This changing landscape is why Employment Practices Liability (EPL) insurance is becoming increasing important for hospitality employers. 

EPL is often included within a Directors & Officers (D&O) policy rather than purchased separately. It’s important to remember that cover levels, exclusions and reporting requirements can vary between insurers. 

It’s worth taking time to:

• Review your level of cover, limits, and exclusions
• Check who is included under the policy
• Fully understand how and when claims must be reported

The importance of early notification

EPL insurance operates on a claims-made basis. This means issues should be reported as soon as they arise, and not when a formal claim is made. 

Early notification could include:

• Informal complaints or early-stage grievances
• Concerns about rotas, pay or workplace behaviour
• Allegations of discrimination, bullying or harassment
• Issues involving difficult or inappropriate customer behaviour

Delaying notification can put your cover at risk, even if you have a policy in place.

If something feels like it could escalate, trust your instinct and seek advice early. Speaking to your broker at the first sign of a problem can help you manage the situation and help you understand your policy obligations and reporting requirements. 

Practical steps hospitality employers can take now

To stay ahead of ongoing employment law change, hospitality employers should:

• Review and update workplace policies, specially around tips, harassment and flexible working
• Train managers to handle requests and complaints fairly and consistently
• Keep clear, accurate records of decisions and communication
• Make sure staff know how to raise concerns safely
• Review insurance cover and reporting requirements

Employment law will continue to evolve, and hospitality businesses are often right in the centre of that change. Putting strong people practices in place, alongside the right insurance support, can reduce risk, support your team and avoid costly disputes. 

Talk to Howden

If something doesn’t feel right or begins to escalate, seek advice early. Speaking to your broker at the first sign of an issue can help you manage the situation effectively and help you understand your policy obligations and reporting requirements.