ERA 2025 for Hospitality: What Restaurants, Hotels and Bars Need to Know

Why ERA 2025 hits hospitality harder

Most UK sectors have a relatively simple workforce structure — mostly permanent employees on fixed hours, with occasional flexible arrangements. Hospitality is the opposite. A typical 40-cover restaurant might have five permanent kitchen staff, ten zero-hours floor staff, and two or three agency workers booked for weekend services. All three categories are directly affected by ERA 2025.

The sector also has high turnover, thin margins, and a workforce that is disproportionately younger — which means more workers in the age bands where NMW increases hit hardest, and more casual arrangements that will eventually need to reflect the guaranteed hours right.

What is already in force from April 2026

National Minimum Wage increase

From 1 April 2026, NMW is £12.71 per hour for workers aged 21 and over — up from £11.44 in 2024. For a restaurant with ten floor staff working an average of 20 hours per week, the annual wage cost increase is significant. This is not an ERA 2025 provision directly, but it runs alongside the ERA 2025 changes and is the most immediate cost impact for most hospitality operators.

SSP from day one

Casual and zero-hours staff who fall sick are now entitled to statutory sick pay from the first day of illness, with no waiting period and no earnings threshold. In a sector where workers often earn less than the old SSP qualifying threshold during lighter weeks, this is a material expansion of entitlement. Review your absence process and payroll setup now.

Mandatory holiday pay records

Keeping records of annual leave and holiday pay for every worker is now a statutory requirement. If your holiday records for casual staff are informal or non-existent, this is a compliance gap that needs addressing. From 1 January 2024, rolled-up holiday pay at 12.07% per payslip is explicitly lawful for irregular hours and zero-hours workers — but records of what was paid are still required.

Agency shift notice obligation

Since February 2026, agencies and hirers jointly must provide agency workers with reasonable notice of shifts. Last-minute same-day bookings and morning-of cancellations are now legally questionable. If your agency cover depends on short-notice flexibility, you need to have a conversation with your agency about what the new standard means.

What is coming in 2027

Guaranteed hours right

Workers on zero-hours or low-hours contracts who work consistent hours over a 12-week reference period must be offered a contract that reflects those hours. In hospitality, this has the most impact on floor staff, bar staff, and kitchen porters — roles that are frequently filled by the same people week after week on zero-hours arrangements that no longer reflect reality.

The data you need to comply — actual hours per worker per reference period — starts accumulating now. If your shift records are on WhatsApp or a spreadsheet that gets overwritten weekly, you will not have usable data when the obligation lands.

Unfair dismissal after six months

The qualifying period for unfair dismissal protection reduces from two years to six months in January 2027. For hospitality — a sector with high turnover and a tendency to manage underperformance informally — this significantly narrows the window for action without process. If someone has been with you for six months, they have employment protection. Managing them out without a fair process from that point exposes you to a tribunal claim.

What to do now

1. Update your absence and SSP process. Every manager who takes a sick call needs to know SSP starts from day one for all qualifying workers.
2. Start recording actual hours per worker. Every shift, every person, real start and end times. This is the data ERA 2025 will require.
3. Review your holiday pay method. From 1 January 2024, 12.07% rolled-up holiday pay is explicitly lawful for genuine zero-hours and irregular hours workers. Make sure whichever method you use — rolled-up or 52-week average — is clearly documented and records are kept.
4. Review your agency arrangements. Confirm in writing that your agency is handling reasonable shift notice correctly.
5. Review any long-standing zero-hours arrangements. Workers who have been doing consistent hours for six months or more are approaching the territory where ERA 2025 starts to require action.

Frequently asked questions