Updates to Square Payroll tip distribution?

[dkhtodd]

I was looking at the new SHIFTS section this morning and happened upon SHIFTS>Settings>Tip Distribution. I noticed that TIP DIRECTLY (Credit cards tips are attributed to the team member who collected the tip) was selected. This confused me because I don't ever recall setting that or telling the system to only give tips to the person who collected. When we set this up a year ago, tips were set to be pooled.

I continued looking around and noticed under PAYROLL>Settings>Payroll Settings that Enable Tip Importing is selected as is Pool & Split tips. This section makes sense to me and I recall seeing this before. This is how the tips should work.

My question is, which section is correct? If SHIFTS is correct, it seems as if the person who is on the register will receive the credit card tips - but that is not how I expected this to work.

Attaching screenshots for reference.

Please advise.

 

The title of this thread has been edited from the original: New SHIFTS: Did something change with Tip Distribution?

[#2]

Hi all, back again as promised with an update. First off, thank you for sharing your feedback on how the recent tip splitting changes impact your business. Our teams have heard you, and understand that having more flexibility with tip calculations is important for both business operations and employee satisfaction.

To address these concerns, we will make the following changes:

• Existing Square Payroll customers will be able to pool and split tips by workday or pay period until April 1, 2022 (extended from December 1, 2021). After April 1st, customers will have 3 options: [1] pay tips directly, [2] split tips by transaction, or [3] pool and split tips by workday.
  
  
• We will expand the existing pool and split by workday option so it is available for non-Payroll sellers. Currently, sellers who don’t use Square Payroll are unable to pool and split tips by workday. After this update, they will be able to download reports that they can upload to their existing payroll providers. 
  
  
• Once the grace period ends on April 1, 2022, the option to pool and split tips by pay period will be removed. We are working to consolidate and expand labor-related functionality within Square, and as we do so we are unable to continue supporting tip pooling and splitting by pay period. We understand this may disappoint some businesses and hope the ability to pool and split tips by workday may work as an alternative. 

Employers were not opted into the new tip splitting method automatically.

If you would like to confirm your settings and continue using the Workday/Pay Period option, follow these steps: 

1. Go to Payroll > Payroll Settings. If you still see the old settings, you are all set!
   
2. If you no longer see the Pay Period or Workday options, like the screenshot below, you may have inadvertently opted into the new tip splitting method:
   
3. If this was a mistake, and you want to switch back to Workday or Pay Period, follow these steps:
   
   Go to Shifts > Settings > Tip distribution and choose Tip directly.
   
   NOTE: You will not actually tip directly. On the next step, you will be prompted to select your actual preferred tip distribution method. This is a temporary workflow during the grace period.
   
   Return to Payroll > Payroll Settings. You will see the old Workday/Pay Period options and select your preferred method.

For those who would like to use the new feature to split tips per transaction, but have hours of operation when no one is clocked in, we wanted to highlight that you have the ability to toggle on or off the “Distribute unattributed tips equally” setting.

If the setting is toggled on, tips received when no one is clocked in will be equally distributed among all tip-eligible team members who clocked in on that workday. If no one clocked in that day, the tips remain unattributed. You can manually apply these tips at the time of processing payroll.

Thank you again for all of your continued support and feedback. We are always looking for better ways to improve our product to support your business and team. 

[#3]

Hi All! I want to thank you for raising your concerns. We completely understand the sentiments here and apologize for the disruption this has caused. We understand the sensitivity with the labor market, and how this impacts your business. We will take this back to our teams and reconsider options.

At a minimum, we can extend the grace period and provide guidance on how to still split tips by workday.  **These options have NOT yet gone away. As long as you don’t select the new “Split by transaction” option in TM, your tip calculations will not be affected.**

I hope to be back soon with some more information on this change today from our teams and give everyone a bit more insight.

[HookedonColfax]

I sincerely hope Square will reconsider and maintain splitting tips by work day as an option. It's the only way we can staff our slow closing/cleaning shifts - otherwise no one would take them. If this is no longer an option we would have to discontinue using the platform. 😞

[fsalazar]

I have to add my strong objection to this new system, it is an absolute disaster. We split tips evenly by pay period, and if that goes away it would be a huge issue. I cannot believe Square thinks that removing an option that employers have been using for years is a good move - add other options if they have been requested, sure, but removing a system that works for many of us employers with the only option going forward is for the business owners to manually do it themselves is just... cracked. Who thought this was a good plan? 

[MFNC206]

Yes, I just noticed this as well. It looks like Square already took away the option even though they said we have until 12/01 ?? (Bad move Square) Many hourly employees, including our entire staff (cashier, expos and cooks) are counting on these tips (evenly split) for any given pay period. Who in the Square executive level has too much time on their hands and decided to "overlord" into regular folks livelihoods? -Bruce@MFNC

[Berolina]

I’m doing payroll tomorrow I hope the tips pooling option is still there or I’ll be in trouble. 

[2ndCharter]

Please let us know your findings. If I go into "Shifts" now and look at yesterday's labor cost, it's all screwed up and doesn't show me what my costs were vs. compensation. It also it putting all the tips onto the logged in cashier, at least in this view.

[thewakezone]

@kellyj Can you provide an update on this?  To be honest, many of us have serious decisions to make regarding staffing, wages, and future POS solutions if this change continues to move forwards.  Thanks

[thewakezone]

To the group as a whole, and maybe I am late to the party, but I just found out a change was made in the Square system that made my "Managers" eligible for tips.  this changes happened Oct 1 and caused $,$$$s in tips to go to managers when they should not have.  They are salaried employees so I don't follow their individual payroll as much as the hourly workers, so I didn't notice.  This is a big deal, so check your settings.

[Donnie-M]

@thewakezone Hey, all you have to do is go into the job and toggle on or off "eligible for tips".  It may have inadvertently toggled all your positions on as square only sees a position title and not that it is management or not management.  Kinda like sanitation canister manager would be the trash bin guy or gal.

[Apt9F]

Hello All - 

I spoke with Square this morning - and apparently, due to the call volume and forums like these, they are extending the grace period for doing it the existing way until April 1, giving them time to “tweak” things. That is what was told to me. 

If someone from @Square ia monitoring this and can confirm, that would be great.  

[Donnie-M]

@Apt9F I do not know how far they have extended anything, but I do know it was actively being looked at.  To give just a little insight:  Square has the payroll department that has to deal with a ton of legal and regulatory "stuff" because they deal with all of the different state and local laws and regulations.  While it might seem simple, anything they do has a lot of scrutiny.  You combine this with the team working on square teams/scheduling along with the point of sale team and there are several moving parts.

Obviously, the big take away here is, there are changes available, but if you leave your settings alone for now there will be nothing any different.  It might take a few days to get everyone on the same page and I really do think we all will get what we need out of this. 

[weaglesf]

Communication is key, here. As I asked in the 2nd post to this thread, is there some liability exposure that made Square remove this feature? If not, then why is it slated to be removed as part of any "enhancement."

If there is a lot of thought put into these complex, interlocking updates, then perhaps there should be the same.amount of thought to rolling them out with proper explanation.

We are not stupid. If it is problematic to allocate tips in this manner, then just say it. You're leaving the manual allocation of tips in the product, so everyone can continue to do as they please, regardless of the regulations. But just tell us that... otherwise you just **bleep**ed tons of your customers off by pretending you know what is best, rather than explaining a problem.

If there is no exposure for Square, then it's just doubly stupid.

[Berolina]

Looks like there is a third party solution to the problem if Square decides to remove tip pooling. https://www.tiphaus.com/square
It costs $69 per month but it looks like it would integrate with the square POS and probably the payroll as well. 

[kellyj]

Hi all, back again as promised with an update. First off, thank you for sharing your feedback on how the recent tip splitting changes impact your business. Our teams have heard you, and understand that having more flexibility with tip calculations is important for both business operations and employee satisfaction.

To address these concerns, we will make the following changes:

• Existing Square Payroll customers will be able to pool and split tips by workday or pay period until April 1, 2022 (extended from December 1, 2021). After April 1st, customers will have 3 options: [1] pay tips directly, [2] split tips by transaction, or [3] pool and split tips by workday.
  
  
• We will expand the existing pool and split by workday option so it is available for non-Payroll sellers. Currently, sellers who don’t use Square Payroll are unable to pool and split tips by workday. After this update, they will be able to download reports that they can upload to their existing payroll providers. 
  
  
• Once the grace period ends on April 1, 2022, the option to pool and split tips by pay period will be removed. We are working to consolidate and expand labor-related functionality within Square, and as we do so we are unable to continue supporting tip pooling and splitting by pay period. We understand this may disappoint some businesses and hope the ability to pool and split tips by workday may work as an alternative. 

Employers were not opted into the new tip splitting method automatically.

If you would like to confirm your settings and continue using the Workday/Pay Period option, follow these steps: 

1. Go to Payroll > Payroll Settings. If you still see the old settings, you are all set!
   
2. If you no longer see the Pay Period or Workday options, like the screenshot below, you may have inadvertently opted into the new tip splitting method:
   
3. If this was a mistake, and you want to switch back to Workday or Pay Period, follow these steps:
   
   Go to Shifts > Settings > Tip distribution and choose Tip directly.
   
   NOTE: You will not actually tip directly. On the next step, you will be prompted to select your actual preferred tip distribution method. This is a temporary workflow during the grace period.
   
   Return to Payroll > Payroll Settings. You will see the old Workday/Pay Period options and select your preferred method.

For those who would like to use the new feature to split tips per transaction, but have hours of operation when no one is clocked in, we wanted to highlight that you have the ability to toggle on or off the “Distribute unattributed tips equally” setting.

If the setting is toggled on, tips received when no one is clocked in will be equally distributed among all tip-eligible team members who clocked in on that workday. If no one clocked in that day, the tips remain unattributed. You can manually apply these tips at the time of processing payroll.

Thank you again for all of your continued support and feedback. We are always looking for better ways to improve our product to support your business and team. 

[Anthem]

I like the advances being made here and have been looking closely at using the payroll feature along with the Teams features I already use. However, not being able to split tips across the pay period is a show-stopper for me. We've managed tips this way for years and our staff is very happy with it.

I'll keep digging in and monitoring as this develops in hopes of being able to further consolidate the various operating tools we use into Square over time. 

Keep it up.

[weaglesf]

Can you tell us *WHY* you refuse to continue to support the ability to split across pay period? To us logical business people it seems so arbitrary and capricious. What is the downside to keeping the functionality that is working already?!! Without an explanation, it just sounds like you don't care nor really understand why it is working so well for so.many. PLEASE GIVE US AN EXPLAINATION.

[2ndCharter]

I'm probably beating a dead horse at this point. I'd like to make a few points about the statement below:

"Once the grace period ends on April 1, 2022, the option to pool and split tips by pay period will be removed. We are working to consolidate and expand labor-related functionality within Square, and as we do so we are unable to continue supporting tip pooling and splitting by pay period."

Please explain how these new features, which are now being rolled out, will impact the ability for us to continue doing this after April 1st (arbitrarily) but not any other point in time after the new options were added?

As one other poster mentioned, we are not dumb people so just lay out for us without "corporate speak". I was a .gov contractor running teams of developers building large data systems for 20 years. We even built and integrated some quite large financial management systems with high volume daily transactions. (CV now out of the way).

The current tip pooling across the pay period with equal division by hours worked is by far the simplest, least processing overhead and least data storage/retrieval mode out of all of the three. It requires no pre-storage of data that isn't already in place. It is simply computational at the point of importing time cards and stored in a field, that is going to already be in use, regardless of methodology used.

I'm sure that Square has some of the brightest developers available and this isn't a situation where it can't be coded. It was already coded and is already functioning as many of your customers have pointed out (and wish to keep in place). We are unaware of any governmental mandate requiring the removal and the arbitrary deactivation further speaks to that.

What it feels like is a decision made internally by people who aren't really looking at the problems this is causing us. We were sold on this feature and now it is going to be retired. Will those of us who continue to champion for it receive a discount on payroll services moving forward? Maybe provide us some free legal zoom (or other legal service) credits while we have to navigate and renegotiate contracts?

That's obviously sarcasm but we really would like a straight answer.

[dsaxena_pdx]

What @2ndCharter said. I'm an ex software developer with 20 years of experience and there's no technical reason this feature needs to go away. Maybe merging of teams and payroll features makes it difficult but pretty much any software problem can be solved with the right set of changes. It may be hard and require some re-architecting but it should be doable.

[fsalazar]

I imagine many of your customers will be looking elsewhere for a POS system that works with our actual requirements, as this is such an inane decision that will affect so many negatively - we will either have to spend time or money to fix something that wasn't broken to begin with but that you have gone out of your way to remove as an option when as someone else mentioned, it is the simplest option that is ALREADY WORKING. 

So disappointed in Square, this is a terrible move. 

[dkhtodd]

You claim to "hear us" but simply postponing the change isn't exactly listening. As of right now there are 76 messages in this thread and 99.9% are your customers telling you this change doesn't work for them. 

As someone else pointed out, if you can turn on all these features on Dec 1 but allow us to use pay periods until April, why do you need to turn off pay periods? I have been an application developer for 20 years what you're doing just doesn't make sense. Unless you can't get "A" to work without turning off "B" then that makes more sense. But if "A" will work even with "B" on, just keep "B" on. I don't know your queries and scripts but why is turning off "B" necessary?

If you read through your comments from paying customers, you will see what we really want is a reason. Something like "hey guys, we are giving you these 10 awesome features you have been asking for, but we have to turn this other thing off"...that may make the pill easier to swallow. But instead it's "We are Square and we threw darts at a board one day and we decided to remove this feature so many paying customers require."

I truly hate the thought of moving to a different payroll provider because it just presents additional work I don't have time for. But at least we now have 6 months to vet companies - unless Square decides to just keep the pay period option.

[Donnie-M]

@kellyj Can we get a clarification on the 3rd option being added to pool and split tips by work day.  Will this be based on the hours worked in the day or divided equally between all people who worked that day?

I.E.  10 people clocked in, $100 in tips, each person allocated $10.  or 10 people clocked in five work 10 hours each and 5 work 5 hours each so tips would be allocated 5 people get $8 each and the other 5 get $4 each?

The question is how exactly will the tips be allocated when split by workday?

@2ndCharter This is a key question for me, if the allocation is by hours worked on that day, then it is not a bad compromise.  The tip pool is still proportionally allocated to the people who are working more hours/slower busier shifts and should result in not much change across a pay period.

If it is split evenly, it is still incentive for team effort as they share equally per day which is what I do with cash tips received.

Donnie-M

[fsalazar]

Unfortunately this would not resolve the issue - tips on a Tuesday are going to differ drastically from a Saturday, and you'll still have to either find a separate solution to split equally over the pay period or deal with a different pay rate per person which will cause a lot of discontent and labor issues. Which no one needs right now.