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Fair Tip Share

‘FairTipShare’ is an accreditation scheme for restaurants, bars, hotels, pubs, casinos and other hospitality businesses. It helps operators who wish to be transparent about the way they distribute the gratuities they collect from customers to their staff.

The scheme seeks to highlight the good practice that exists in the UK hospitality industry.

It’s a simple and easy way to show customers that your business has a fair and transparent way of dealing with the monies they choose to leave, so they can pay with confidence.

It also tells employees and potential recruits about the standards that you as a business choose to adopt, that they will be treated fairly, and that you are an employer of choice.

FairTipShare is backed by leading operators across the hospitality industry.

How does it work?

To become accredited under the FairTipShare scheme, hospitality operators will undergo an independent review. This will assess their policies and practices against a set of good practice guidelines.

Each operator will pay an annual fee for the assessment and, if they are successful, their accreditation will be publicised on the FairTipShare website. They will also be provided with statements and materials to help them promote their accreditation in their venues and through their own marketing activities.

Where an operator’s application falls short of meeting the good practice guidelines, FairTipShare will provide confidential recommendations for improvements, so they can bring their approach into line with the standards.

Summary of the main principles

Each operator who applies for the FairTipShare accreditation will be asked to demonstrate they are meeting the 12 core principles of the scheme. These are:

Any tips or service charges paid by customers should be managed and processed in a way that is fair and transparent.

Any service charge which the customer is invited to pay is always discretionary and should be clearly advertised as such.

If customers are invited to pay for service, the business should operate a fair and well-managed tronc system.

Customers expect service charges to be paid to staff in addition to salaries or basic pay, not as part of contractual agreements or obligations.

The tronc system should seek to reward and benefit all members of staff who contribute to the customer experience and who deliver the service to consumers.

Businesses should generally not get involved in cash tipping. Whatever cash staff receive directly from customers belongs to them.

Businesses should ensure that staff are aware of their legal obligations to record and declare any cash tips to HMRC.

The costs of collecting, processing, administering and distributing tips and service charge to staff (collectively known as administration costs), generally these do not exceed 5% of the tips and service charge collected.

With the exception of these costs, businesses should make 100% of the funds available to the tronc system to allocate to the members.

Customers and staff should be clearly advised of whether a tronc system exists, who manages it (a member of staff or an independent third party), and which groups of staff receive a share.

Staff should be made aware of the rules of the tronc scheme, how their own share is calculated (e.g. points, minimum rates, equal share), the identity of the Troncmaster, and how to raise or ask questions regarding the operation of their scheme.

The Troncmaster should manage the tronc scheme fairly and free of bias, favouritism, personal friendships or self-interest and should not unfairly exclude certain individuals or groups of staff.

Why the hospitality industry needs the FairTipShare accreditation

There is confusion around what can and should happen to tips, service charge and other gratuities that customers may pay in a hospitality organisation. The confusion is far reaching, touching customers, employees and business owners alike.

Some discretionary payments made by customers belong to the employee they are given to; others legally belong to the business. It is up to the business to decide how much (if any) of the monies they collect to distribute to staff and in what way (within certain rules).

This allows for a certain amount of flexibility in passing on discretionary payments to staff. Most operators take a reasonable approach to distributing these funds. A small number do not, and this leads to adverse media coverage and trade union campaigns which tarnish the reputation of the whole industry.

It also leads to periodic attention from government and attempts to implement greater restrictions on how hospitality businesses remunerate their staff. All of these are damaging to the industry.

The FairTipShare accreditation enables the industry to work together to promote the ethical practices operators follow when passing on discretionary payments to staff. Being open and transparent about reasonable, clear and consistent approaches, it aims to give both customers and staff confidence in the treatment of tips in a business.

The scheme aims to provide operators whose policies and practices are designed with the interests of customers and staff in mind, to distinguish themselves from those who don’t.

Who is leading this initiative?

The FairTipShare scheme is being promoted and run by operators from across the industry as well as technical advisers and hospitality thought leaders.

It has the support of the trade and industry bodies. These include UK Hospitality, which represents over 700 companies in the UK, and the European Hotel Managers Association, which has more than 400 hotel members in 27 countries.

Current board members are:

David Cheeseman, MD Chef Express UK and Momentum

Zuleika Fennell, MD, Corbin & King

Tim Healy, Co-owner, Jo Allens

Mark Selby, MD, Wahaca

Jon Dawson, Head of People, Mandarin Oriental

Marianna Alfa, MD at Blossom Hospitality

James Robson, Founder, Mews of Mayfair

Gioele Camarlinghi, European Hotel Managers Association

Mike Saul, Head of Hospitality, Barclays

Kevin Watson, MD, Amadeus

Peter Davies, MD, WMT Troncmaster Services

David McHattie, The Devonshire Arms

Chris Sheppardson, CEO at EP Hospitality

FairTipShare’s board believe in working together to promote clear communication and inspire positive change. We hope you do too. Get involved.

How to get involved

Are you an operator who would like to be accredited under the scheme? Or a potential sponsor who wants to promote this ground-breaking industry initiative?

Please register your interest, state whether you are interested in accreditation or sponsorship, and we’ll be in touch.

FairTipShare Launch Day