To the Power of TRONC
So, who knows what TRONC is? I’ll be honest, I didn’t when we got contacted by a Client of hours who runs major International 4 and 5 star hotels.
It turns out that a TRONC scheme is a very powerful process that can be utilised through an accredited HMRC scheme. The scheme allows a Company to distribute a Discretionary Service Charge to its employees free of National Insurance, subject to certain conditions.
What does implementing a TRONC Scheme mean?
Implementing a TRONC scheme has wide ranging attractions for the hotel and restaurant industry. It allows employees to earn up to 13.8%more, even if they do not receive any higher percentage of the Discretionary Service Charge.
The one catch to all of this is that the Company cannot have any say in how the charges are distributed,although the Company can retain part of the income to cover admin and other associated costs. The employees need to set up a TRONC Committee to decide how the funds will be distributed.
Our client wanted to take advantage of the TRONC scheme as they had recently taken on a number of new hotels that all had differing terms around distribution of the Discretionary Service Charge. They engaged Heidi at HR Smart to conduct a project to implement the TRONC scheme across two of their hotels in the UK.
Heidi set up the TRONC committees at each hotel, which were made up of Department Heads and staff representatives from across the various different areas of the hotel. Once the Committee had been set up, Heidi then conducted a number of meetings to decide how the Service Charge would be split across the departments. Liaison was also required with the hotel Company directorate and payroll to make sure that the procedures to measure and pay out the monies were available.
The project took around two months and has been a big success for the Client, giving them better employee engagement and also a great news story in terms of investing in their employees.