How The Hospitality Sector Can Prepare For The Upcoming Employment Rights Bill 2025 Changes
By Joel Beverley and James Lintern, co-founders at RotaCloud (www.rotacloud.com) – workforce management software for growing businesses.
The Employment Rights Bill 2025 is set to bring the biggest and most significant employment law changes in a generation – including changes that will impact how hospitality providers manage their teams.
The Employment Rights Bill 2025 is the first phase of Parliament’s plan to ‘Make Work Pay’. The Bill will introduce amendments like changes to zero-hour contracts, stronger sick pay and protection for unfair dismissal, plus flexible working and updates to tipping laws, all to increase employee rights and secure their pay.
These employment law changes are due to become law in Autumn 2025 (with some phasing in up to 2027), and will directly affect the care sector’s employment rights in the UK.
With this in mind, Joel Beverley and James Lintern, share insights, including how the UK hospitality sector can prepare.
Lintern said: “Since the Autumn Budget of 2024 and its increase to wages and NI contributions, hospitality has seen a significant climb in labour costs, including an additional £2,500 a year to employ a full-time member of staff.
“While the Employment Rights Bill in the UK is set to bring the most significant changes to employment law in a generation, the hospitality sector faces yet another rise in costs, with its margins already extremely tight.
The main changes to be aware of include:
Changes to zero-hour contracts
Hospitality often greatly relies on student and seasonal workers, where zero-hour (or casual) contracts have been useful due to their flexibility. However, the Employment Rights Bill aims to restrict their use.
Employers will be required to: offer contracts with regular (and guaranteed) hours; provide reasonable notice for shifts; fund compensation for last-minute changes
Day-one rights for staff – including unfair dismissal claims, statutory sick pay (SSP), paternity leave and unpaid parental leave
This will no doubt heighten your pressure in tracking attendance and reviewing (and tightening) your onboarding process. There’ll be more metrics to track to ensure you’re compliant with employment laws.
Flexible working as default
Employers will be expected to: always consider flexible working from day one of employment; must justify reasons for denying requests; provide a reasonable notice period for shifts
Tipping
On top of having a written policy and it being illegal to withhold tips from staff, managers will be expected to consult staff before creating (or altering) their tipping policy, and update it every three years.
Beverley commented that: “In such a constant, fast-paced sector, managers already juggle staff shortages, compliance with labour laws, and the ever-looming seasonal demand – and all the stress that comes with it. The upcoming changes will naturally feel daunting, but preparing early (and using the right digital tools) can make the transition far smoother, help you cut operational costs, and even strengthen how your team work.
“For hospitality businesses, this means reviewing how you schedule shifts, how contracts are written, and how quickly staff have access to their rights. These updates won’t just affect your payroll and budgets – they’ll reshape how you manage your team day-to-day”.
Hospitality owner/managers’ checklist for the Employment Rights Bill 2025:
• Review current contracts & HR processes – Prepare to update contracts and HR policies covering shift cancellations, notice periods, flexible working requests, and how compensation will be calculated. Also, tighten your onboarding process for new employees with the upcoming new day-one rights.
• Plan for peak periods – Forecasting demand and labour costs will be your saviour for your busy seasons, helping you to schedule early and limit last-minute edits with compliance in mind.
• Train managers – With changes to guaranteed hours and flexible working, it’s important to train your managers on how onboarding will change and what will be considered reasonable before refusing a flexible working request.
• Focus on forecasting – Whether demand or labour costs, having an idea of how busy a period could be and how much it could cost will save you from under- and over-staffing, plus help you budget.
• Engage with employees – Consult them before creating your tipping policy, and determine whether they would prefer to remain on zero-hour contracts or not.
• Start leaving manual admin behind – Manual processes and managing rotas through spreadsheets and printouts are too risky with the new Employment Rights Bill amendments. With digital systems like RotaCloud, compliance is simple.
Everything from staffing levels and working hours to time tracking and budgeting is constantly visible and recorded.
Lintern added: “Hospitality thrives on flexibility. So, while these new changes to hospitality employment law seem to take the flexibility from hospitality managers, the right digital tools make compliance and flexibility work together effortlessly.
While digital transformation certainly makes things smoother, easier, and more efficient, it’s now about protecting your staff, improving morale and your service, and future-proofing your business”.
For more information, visit https://rotacloud.com/blog/employment-rights-bill-uk-hospitality/