PR: The risks of getting your tronc wrong

As a hospitality business owner, it's important to make sure there is compliant management and distribution of  tronc payments. Tronc arrangements are an important part of the hospitality industry, allowing businesses to distribute tips, gratuities, and service charges to employees in a fair and transparent manner. However, if a tronc is not set up and managed correctly, it can lead to significant financial risks and negative consequences for the business.

Unfortunately, some hospitality businesses neglect their tronc obligations, either intentionally or unintentionally. This can have serious consequences, both for the business and for the employees who rely on these payments as a significant part of their income. One of the major risks of getting a tronc scheme wrong is the potential for public backlash and negative publicity. In recent years, several high-profile cases have made headlines for all the wrong reasons, highlighting the importance of getting tronc arrangements right.

For instance, in 2018, it was revealed that the UK restaurant chain Pizza Express was using a tronc  that effectively took a portion of tips away from waiting staff and gave it to the company. The UK restaurant chain was criticized for using a tronc scheme to divert a portion of its staff's tips to cover the cost of staff meals. This led to widespread criticism and protests from employees and industry groups, leading to a public apology and a change in its tronc policies.

Similarly, in 2019, the UK pub chain JD Wetherspoon was found to have been deducting a "service charge" from the tips of its employees, rather than distributing the tips directly to them. This led to a backlash from employees and customers, and the company eventually agreed to stop the practice and pay back any withheld tips.

Another example also occurred in 2019, when a popular US restaurant chain was accused of using a tronc arrangement to divert a portion of its staff's tips to management. The company faced a wave of negative publicity and criticism, leading to a class-action lawsuit and a settlement with its employees.

These examples illustrate the importance of properly managing and distributing tronc payments. Ignoring your tronc obligations can lead to potential legal and financial problems for your business, as well as damage your reputation and harm your relationships with employees. By setting up and following a clear system for managing tronc payments, you can avoid these problems and maintain a positive work environment.

It's important for businesses to carefully consider their tronc policies and ensure that they are fair, transparent, and compliant with the law. By taking the time to get it right, businesses can avoid the risks of negative publicity and potential legal action, and ensure that their employees are treated fairly and equitably.