June 15, 2024

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Colleague ‘Tipping’ Scheme could Backfire, Warns Employment Specialist

With more than 250 UK-based firms using peer-to-peer recognition technology employers are being urged to think twice regarding the legal implications of allowing staff to ‘tip’ fellow colleagues with a ‘micro bonus’ for doing a good job.

Software programmes like Bonusly and Reward Gateway aim to boost employee engagement and create a culture of positive reinforcement by allowing co-workers a budget to tip each other small amounts of money each month.

But, warns employment specialist Marc Long, partner at Clarke Willmott LLP, such schemes are open to abuse and argument, and could potentially lead to discrimination claims. “Anything where staff can review others and get a financial benefit is open to abuse.

“The practice of patting someone on the back with a ‘tip’ could actually end up dividing staff members. It could create little cliques of pals who constantly reward each other.”

“Such schemes must also offer equal access for everyone using them. If someone feels left out and believes that this is down to their ethnicity, disability or sexual orientation for instance, then employers could find themselves at risk of a discrimination claim.

“As well, there is the issue of the impact of bringing in a ‘tipping scheme’ on employees’ mental health. The pressure of feeling that you need to ingratiate yourself with the ‘in crowd’ or else miss out, could aggravate conditions such as depression and anxiety.

“The designers of these programmes can’t really protect against these risks, rather it’s the employers that need to monitor their use, or else it could backfire and be viewed as a negative by staff.”

Recently, Bonusly and Reward Gateway, two of the main providers of these schemes told BBC Radio 5 Live’s Wake Up To Money that they had seen a big rise in the number of UK businesses signing up to give their staff the power to hand out small cash rewards.

US-based firm Bonusly said it had seen a 75% increase in UK customers in the last 12 months alone, and Reward Gateway told the station it had seen a 100% increase in the number of UK businesses using its services to allow staff to give small amounts of cash to their colleagues.

Clarke Willmott LLP is a national law firm with seven offices across the country, in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton.

Marc Long is a partner in Clarke Willmott’s Employment & HR team and is a member of the Employment Lawyers Association. He can be contacted on: marc.long@clarkewillmott.com.