Service Charges Statement Process

Ensuring Equitable Distribution of Service Charges – A Step-by-Step Walkthrough for Employers Adapting to Recent Changes in Legislation

With the recent enactment of the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 in Ireland, a significant shift has occurred in how gratuities and mandatory charges are handled in the workplace. This legislation mandates that all credit card tips must be equitably shared among employees, requiring employers to issue a detailed "Tips Statement" to each recipient prior to payroll. In this article, we will explore the process and unveil how Alkimii, an innovative people management solution, has automated steps in the process, revolutionizing tip allocation and ensuring seamless compliance. 

Step 1: Setting Up the Service Charge Statement Letter (once off step)

• This step will only need to be completed once. Within HR Automation, open the document store and add a document.
• Add the document title as “Service Charges”
• For the type select “Letter” and then select the “Service Charges” option.
• If you wish, you can set up a KPI for “Service Charges” and then select this from the dropdown list.

• Update the declaration to state the employee has “read and acknowledge the service charges statement" or whatever variation you wish to use.
• Build out the letter as you would for a career path letter using the auto-populated fields
• As normal, save the document and proceed to create a form and then a pack. 

Step 2: Entering the Service Charges in Actual

• The night team will now have an additional step to complete in their daily process. They must now enter the credit card service charges for the site which will be available to them on the “Trial Balance Report”. This will appear as an additional line item within the Actuals screen in Revenue.

Step 3: Add the Payment in Week Details

• This step will be handled by the HR Manager. They will need to add the monetary value of tips to be allocated to the employee.
• Click “Add Payment” and select “Service Charge Payment”.
• You will need to select a date period using the calendar function as their default setting will be the current week. Once the date period is selected, the total service charges for that period will populate down the bottom of the modal.
• The value is still a manual calculation and will need to be entered by the HR Manager. Alkimii will not generate this figure for you. 
• You can select whether the service charge payment has been calculated by “hours” or “value”
• Once satisfied with the entry, click “Add”.
• This entry will be time and date stamped with the Manager's name for further reference.

Step 4: Preparing for Payroll in the Week Costs

• Now it is time for payroll
• As per usual, the Payroll Processor downloads the timesheet audit report and reviews the data for any anomalies.
• The only difference appears when you go to generate the payroll export file. You will now see a checkbox appear. If ticked, this will automatically issue the tips statement to the employees. If left unticked, no letter will be issued.