You’ve probably heard that the allocation of tips is changing in the UK this year.
But what does it actually mean for your restaurant? And should you use Tronc to manage your tips going forward?
You’ve come to the right place for answers! Keep reading for an overview of the new bill, what it means for restaurants, and the pros and cons of using a tronc scheme to allocate tips.
What is the Employment (Allocation of Tips) Act 2023?
The biggest news for tronc in 2024 is the new legislation coming into effect later this year.
So, what is it?
In 2023, the UK government published a draft code of practice about the fair and transparent distribution of tips. The bill makes it illegal for employers to withhold tips from employees, ensuring that the funds are distributed fairly.
The act comes into effect on the 1st of July, 2024 in England, Scotland, and Wales. Ireland has its own regulations for tips, gratuities, and service charges.
What Does it Mean For the Future of Tipping?
Here are the highlights:
Employers must distribute tips to workers without any deductions. Payments must also be paid to employees no later than the end of the following month.
Employers aren’t required to distribute all tips evenly between workers. For example, an employee working a 30-hour week may get a higher percentage than an employee working a 10-hour week. So long as employers are clear and transparent about how they distribute tips and why they’re doing it a certain way, they’re good to go.
Employers need a written policy on tip distribution. The policy must be accessible to all employees (for example, by adding it to the employee handbook), and they all must agree that the process is fair.
Employers must record how they manage tips. Either using technology or manually (although this would be tiresome), employers need to keep a record of every tip, gratuity, and service charge to ensure it’s all distributed fairly.
Workers can request information from the tipping record. This ensures total transparency, and allows them to bring claims to an Employment Tribunal — hopefully, this won’t be an issue for most restaurants!
The draft code is under review until 22 February 2024, so it’s likely there will be other updates before it comes into effect (check the UK government site for changes and guidance).
Pros and Cons of Using Tronc to Allocate Tips
A tronc is an arrangement for collecting and distributing tips, gratuities, and service charges.
How you calculate tronc is up to you, and there’s no requirement to use a tronc scheme under the new legislation. If you’re unsure about using one, here are some of the pros and cons to consider:
|Ensure tips are distributed fairly.
|Tronc schemes can be complex.
|Track and record all tips, gratuities, and service charges.
|Someone (the troncmaster) must handle the time-consuming, administrative tasks related to the tronc.
|Provide transparency for workers.
|You can no longer use the tronc pot (deductions) to pay for the tronc system itself.
As an alternative to complex tronc schemes, keep your eyes peeled for Nory Tips which is coming soon 🤩
Nory Tips will fully automate tip management. The entire journey from a customer paying their bill to distributing tips to teams and then finally processed to payroll – all done in one tap. Nory will make tip allocation a breeze. Fair, fast, and transparent — but most importantly, compliant with the new Employment Act!
Contact us to learn more 👋
FAQs about tronc
What is a tronc payment?
A tronc payment is a tip, gratuity, or service charge that’s paid into a common fund for distribution to restaurant staff.
Why is it called tronc?
The word originates from the French phrase ‘tronc des pauvres’, which loosely translates to ‘collection box’.
What is the difference between tips and tronc?
Tips are the payments customers make to staff in addition to the cost of their meals. Tronc is the pay arrangement used to distribute these tips between staff.