How Tech and Legislation are Changing the Future of Tipping

As hospitality operators, staff and consumers will all be aware by now Parliament has passed the Employment (Allocation of Tips) Act which is due to come into effect in early 2024. Primarily designed to deal with the small (but persistent) minority of businesses who were not passing tips and service charges to their staff, the legislation also sets much store on dealing with matters “fairly” and “transparently”, although we await the detail of how the Government envisages this happening from a practical perspective.

As with many areas of a hospitality business’s operations, tech has been making significant advances over the last few years in the area of tipping. Currently the available tech solutions tend to fall into one of two categories:

• Tip or tronc calculation tools which are contained within a wider software product used by a business, such as Fourth Hospitality or similar. This functionality will be used by members of staff involved in the finance or payroll process. The software is not aimed at, available to, or used by the wider team who receive tips or tronc but are not involved in the process.
• Software which allows for tips and service charges to be managed entirely separately from the business or simply acts as a mechanism to pass funds directly from customer to team member. These software packages are typically linked to a smartphone app that gives the employee visibility, but removes it in part or in full for the business.

I’ve been working with hospitality businesses and staff for 20 years on all things tipping-related. What that experience has taught me is that both parties – businesses and employees – have a need for transparency and visibility, and that both have a legitimate interest in knowing that matters have been dealt with legally as well as fairly.

TroncBox is a new cloud-based software solution designed and built by WMT Troncmaster Services Ltd, the UK’s leading provider of tronc advice, support and outsourced management services and available exclusively to our clients. TroncBox provides all of the functionality that a business needs, but also gives the employee transparency and visibility as well as allowing the Troncmaster to manage their scheme in an efficient way. It’s the first product on the market to be aimed at all three parties to an effective tronc – business, Troncmaster and employee.

TroncBox does away with spreadsheets, emails, and transferring data in ways which may not be wholly secure. It allows for data to be uploaded by clients and can accept imports from many of the leading T&A and rota software providers. In time this data can be collected by TroncBox via an API link to the rota software, improving efficiency even further. It already can be integrated with most leading EPOS providers, meaning that data regarding service charge receipts can be automatically collected, and allowing the Troncmaster to verify that they have 100% of the funds customers pay to allocate – an important requirement of the forthcoming rules.

The smartphone app allows the Troncmaster to easily provide employees with much more information about their scheme, how it is operated, and how their award is calculated. The new legislation gives employees the right to access much more information than is currently the case (for example, details of total tips or service charges received at their site) and this information can be pro-actively disseminated through TroncBox. It allows for the Troncmaster to issue documents and letters which can be digitally signed and a messaging function so that employees can communicate directly with the Troncmaster.

As more data is processed and held within TroncBox it will begin to provide businesses with sophisticated analysis and trends including the ability to benchmark against industry averages, making it a powerful tool to ensure that service charge and tronc continues to reward, motivate and incentivize teams.

Written by Peter Davies, Managing Director and Co-owner of WMT Troncmaster Services Ltd