Hospitality employers have more compliance obligations in 2026 than ever before

The hospitality sector faces a unique combination of employment law and immigration challenges.

High staff turnover, irregular hours, tipping obligations, a heavy reliance on overseas workers, and a workforce spanning employees, workers, and agency staff  all under significant cost pressure create a complex compliance environment.

The April 2026 changes have added further layers of risk. Employers who have not yet reviewed their  position should do so as a priority.

Statutory Sick Pay from day one

From 6 April 2026, SSP is payable from the first day of any qualifying absence. 

The removal of the lower earnings limit means all employees now qualify, regardless of earnings.

For hospitality businesses with large numbers of part-time, casual, or zero-hours staff, this is a material change.

Action point: Review contracts and staff handbooks. Any reference to waiting days or earnings thresholds is now out of date.

Tipping law and the October 2026 changes

The Employment (Allocation of Tips) Act 2023 introduced significant reforms to how tips, gratuities, and service charges must be handled.

From October 2026, employers will be required to consult with workers or their representatives before introducing or amending a tipping policy.

If your tipping arrangements have not been reviewed since the initial reforms, this should now be prioritised.

Immigration compliance and the sponsor licence

Hospitality was one of the sectors most heavily targeted in the Home Office enforcement activity during2025. The April 2026 per-pay-period salary compliance rule is directly relevant  where staff are paid on variable hours or shift patterns.

Updated sponsor guidance (March 2026) has also introduced:

• Additional right-to-work check requirements 
• Increased scrutiny of self-employed arrangements and secondees 

Action point:  Audit payroll and sponsorship records against current UK Visas and Immigration (UKVI) requirements.

Employment status  getting “worker” classification right

The hospitality sector relies heavily on workers and casual staff.

Workers (as distinct from employees) are entitled to:

• National Minimum Wage 

• SSP (from day one) 

• Paid annual leave 

• Pension auto-enrolment 

• Protection from unlawful deductions 

Misclassifying individuals as self-employed to avoid these obligations is a key enforcement risk, particularly with the Fair Work Agency now operational.

Practical priorities for hospitality employers

• Update SSP policies and payroll systems for day-one entitlement 

• Review tipping policies in advance of October 2026 consultation requirements 

• Audit sponsor licence compliance, particularly for workers on variable hours 

• Review right-to-work documentation across all staff (including agency workers) 

• Ensure zero-hours and casual contracts accurately reflect employment status 

• Train managers on absence management under the new SSP regime

How Davenport Solicitors can help

At Davenport Solicitors, we advise hospitality businesses across the UK  from independent venues to multi-site operators.

We can support with:

• Contract and policy reviews 
• Sponsor licence audits and immigration compliance 
• Employment disputes and tribunal defence 
• Management training tailored to hospitality operations

Call us on 020 7903 6888 or email contact@davenportsolicitors.com