TRONC: Top Tips for Managing Tips

TRONC comes into force in October of this year (2024) and businesses in certain sectors will be impacted, especially if your business manages tips and gratuities, through cash or discretionary service charges. The incoming legislation means that businesses may need to re-evaluate their current processes, or find themselves at risk of non-compliance.

To help with the transition our experts at Croner have compiled this handy list of tips, to help your business effectively manage Tronc, whilst remaining compliant. 

For more information and for additional support regarding the Employment (Allocation of Tips) Act 2023 call the Croner Pay and Reward team on 0800 470 2706. 

Allocate a Troncmaster

This should be one of the first decisions you make, as it will determine who manages your tronc system. Your Troncmaster can be assigned either to an employee or a third-party provider. 

As expected there are both positives and negatives for either option.

Assigning an employee as Troncmaster:

• Saves costs 
• May lack the necessary skills and experience to manage effectively

Third party Troncmaster:

• Can provide expertise and necessary experience
• Comes at higher costs

Ideally pick the option that works best for your business.

Including your team in the decision making process when it comes to tips and gratuities is not only good practice but it's essential. Many people working in the hospitality sector come to rely on tips as part of their income so their opinion carries a great deal of weight.

Involve employees in the process 

Front of house staff in hospitality usually determine how generous tips tend to be and if they feel there is any unfairness, then they may feel demotivated, which could result in a decline in service standards. To counter this, involving them in the Tronc process, shows a deal of trust and transparency.

Keep records accurately

Keeping accurate records is of the utmost importance. The new legislation will give your staff the right to request information regarding their allocation of tips. Whilst there isn’t any specific guidance on how long you should keep records for, as yet, a good recommendation is to keep records for at least three years. 

Create a Tronc policy

Creating a policy on Tronc can ensure all staff are informed on how tips are collected and distributed as well as outlining if there are any fees or deductions. This needs to be communicated to employees effectively so they are aware of how their tips are managed. 

It should also outline the scheme structure for total transparency.

Examples of Tronc scheme structures

This is determined by the Troncmaster. Typically how a tronc scheme is structured depends on a few variables, namely, job roles involved, the type of business and how tip payments are made. 

Equal

Tronc receipts are divided equally by all employees. This is regardless of role, seniority, responsibility, performance or any other defining factor. It ensures that all the tips are shared between the whole team.

Points based

The Troncmaster has discretion on how to reward employees. Distribution can be based on role, customer feedback and hours.

Performance based

This is split based on individual performance, feedback from customers and reaching and exceeding sales targets. This can incentivise staff to give exceptional customer service, and reward top performers. 

Tiered system

This is split into sections based on job role level of service and level of seniority/responsibility. This means employees who help customers receive bigger rewards. 

Whatever scheme you use, this must be communicated clearly to staff and outlined in your policy, transparently. This will ensure fairness of all employees including those in either temp or agency positions.

Check to make sure you’re compliant with current legislation

Ensure your Tronc system is compliant with the latest legislation and is legally compliant with the Employment (Allocation of Tips) Bill. This will guarantee that workers receive their full tips and also safeguard you against allegations of unfair treatment that might lead to an employee pursuing legal action in a tribunal.Involve your staff in the process

Create a dispute resolution process

In the event that an employee does raise a dispute, it is sound practice to create and clearly outline a dispute resolution system in your Tronc policy. This will inform staff exactly how to raise a dispute whilst also helping to increase trust with your business through transparency.

For more information on how you can ensure compliance with Tronc contact the Croner Pay and Rewards team today on 0800 470 2706.

With over 80 years’ experience in helping businesses stay compliant with HR, Employment Law and Health & Safety legislation our skilled advisors can take the worry out of creating and implementing policy, so you can focus on growing your business.