That tip jar sitting on the counter means more than most customers realize. Restaurant tips from patrons can make the difference between financial wellness and dire straits for many hourly workers.

Tips play an important role in restaurant workers’ wages.[1] In America, as much as 62 percent of a restaurant worker’s hourly income comes from tips.[2] Tip income matters tremendously to workers. It helps them pay bills, buy groceries, and keep the lights on.

Unfortunately for most hourly workers, America’s tipping culture is not very reliable. While customers are likely to tip waitstaff (82 percent) and bartenders (61 percent), only a quarter of Americans place tips in fast food and coffee shop tip jars.[3] Worse, 20 percent of restaurant diners don’t leave a tip at all, and 42 percent feel that tipping is optional. To workers, those tips are essential.[4]

Although the challenges of fair tipping cannot be solved overnight, we can solve an urgent problem for hourly worker. The contents of the tip jar don’t always make their way into workers’ pockets at the end of each shift. Instead, sometimes workers must wait until the next shift, the end of the week, or even the next payday, which makes it harder to make ends meet. The solution lies in closing the gap in timing between when workers earn their tips and when they receive them.

TimelyTips, a program from PayActiv, the leading provider in Earned Wage Access, allows hourly workers to access their tips immediately at the end of their shift. The TimelyTips platform distributes the employee’s tips electronically through the PayActiv app. Their earnings are right at their fingertips, and they never have to wait to get paid.

TimelyTips doesn’t just help the employee. It helps the employer, too.

Most restaurants receive the majority of their compensation via credit card, which means the income generated from tonight’s dinner service won’t hit the bank account for another forty-eight hours. By distributing tips at the end of each shift, restaurants are fronting cash they have not yet received. TimelyTips are fronted by PayActiv, not the restaurant, removing that burden for employers.

For those restaurants not distributing tips until payday, making this shift will generate an immediate morale boost to workers. When financial stress decreases, employees show an increase in overall engagement and productivity at work.

Restaurant owners know that dealing with taxable tips can be a time-consuming nightmare. That explains why $11 billion in tip-related income goes unreported each year.[5] TimelyTips saves management the time spent calculating, pooling, and dividing tips for workers, as this program automatically and accurately calculates tip-pooling distribution and disbursement at the end of each shift. Employers can also enjoy increased security with TimelyTips because maintaining petty cash is no longer necessary.

This program also helps employers to attract and retain employees. Promoting immediate access to wages and tips shows workers that you value their time and effort. That’s also incredibly valuable to employers, as 70 percent of employees are likely to be attracted to a company that cares about their financial well-being.[6]

Why not take care of your workers and alleviate some of their financial stress so they can provide better service to your customers?

Why not give them access to TimelyTips?

---

[1] Financial Etiquette Survey: Exploring Americans’ Attitudes on Tipping and Splitting Restaurant Bills, TD Ameritrade, February 2020, https://s2.q4cdn.com/437609071/files/doc_news/research/2020/financial-etiquette-survey.pdf.

[2] “PayScale’s Restaurant Report: The Agony and Ecstasy of Food Service Workers,” PayScale, https://www.payscale.com/data-packages/restaurant-report/full-data.

[3] Financial Etiquette Survey.

[4] Ibid.

[5] Bourree Lam, “How Much Do Waiters Really Earn in Tips?” The Atlantic, February 18, 2015, https://www.theatlantic.com/business/archive/2015/02/how-much-do-waiters-really-earn-in-tips/385515/.

[6] “Why Employee Financial Wellness Matters,” PayActiv, https://www.payactiv.com/infographic/why-financial-wellness/.