executive interview series:

Expert Interview: Gratuity Solutions on Pioneering Automated Tip Pooling and Distribution

Skyline Windows is proud to feature industry leaders who have shaped their respective fields through innovation and excellence. Today we're interviewing Aleksandar Stepanovich, the CTO and Co-Founder of Gratuity Solutions, the company that pioneered automated tip pooling and distribution for the hospitality industry. Their patent-protected technology now serves over 14,000 locations including iconic restaurant brands across the nation.

At Skyline Windows, we've spent over a century building infrastructure that endures, from Rockefeller Center to The Chrysler Building. We recognize companies that share our commitment to setting industry standards, which is why we were eager to speak with the team that invented an entirely new category of hospitality technology.

Q: For those unfamiliar with the concept, what is automated tip pooling and distribution, and why did it need to be invented?

Aleks: Automated tip pooling is the technology-driven process of calculating, validating, and distributing employee tips without manual spreadsheet work. Before we pioneered this category in 2013, restaurant managers spent 8-12 hours per week per location manually calculating tips; matching credit card receipts to employees, applying pooling rules, validating compliance with state wage laws, and reconciling everything for payroll. It was error-prone, time-consuming, and created significant legal liability. We invented automated tip pooling because hospitality operators needed infrastructure-level reliability for a mission-critical business process. Our two patents (U.S. Patent Nos. 9,741,050 and 10,726,436) cover the methodology for automated calculation, allocation, and instant distribution of employee earnings. Today we've processed over $16 billion across 14,000+ locations including Applebee's, Chili's, IHOP, Bob Evans, and Outback Steakhouse. What started as eliminating spreadsheets evolved into full compliance automation, instant employee payouts, and enterprise-scale payment infrastructure.

Q: What makes a tip management system truly "automated" versus just digitized?

Aleks: True automation means zero manual intervention between transaction and payout. Our system integrates directly with POS systems; Toast, Aloha, Micros, Square, Clover, and 40+ others; so every transaction flows automatically with product details, sale amounts, employee IDs, and timestamps. No CSV exports. No data re-entry. From there, 150+ proprietary algorithms we've built over 13 years apply commission rules, validate compliance against state-specific regulations, calculate hourly wages with overtime multipliers, and distribute earnings through eight integrated payment partners. Employees see transaction-level breakdowns on our mobile app before payroll closes. The system flags compliance violations before they process; California's prohibition on mandatory tip pooling with managers, New York's service charge rules, Texas's tip credit calculations all apply automatically based on location. Digitization means moving spreadsheets to software. Automation means eliminating human decision points entirely while maintaining accuracy and compliance. That's why multi-location operators trust us, we handle complexity they can't scale manually.

Q: How does multi-state compliance work when every jurisdiction has different tip pooling regulations?

Aleks: Multi-state compliance is the most complex challenge in tip management because regulations vary dramatically. California prohibits mandatory tip pooling with managers. Oregon requires specific tip pool participant categories. New York distinguishes between service charges and gratuities with different tax treatment. Texas allows tip credits up to $5.12/hour while other states prohibit them entirely. Our system applies state-specific rules automatically based on each location's address—when an employee clocks in at a California location, California rules apply. When they clock in at a Texas location, Texas rules apply. The 150+ proprietary algorithms we've built validate every tip distribution before it processes, flagging violations before they become DOL audit findings. We update compliance logic automatically when regulations change, operators don't reconfigure anything. This is critical because tip pooling violations carry severe penalties: back wages, liquidated damages, and attorney fees exceeding $100,000 per violation. Our AI is trained on $16 billion in transaction data across all 50 states, so we've encountered and solved edge cases competitors entering the market years later haven't seen yet.

Q: What's the actual ROI for restaurant operators who implement automated tip management?

Aleks: The ROI breaks down across three categories: labor cost reduction, compliance risk mitigation, and employee retention gains. On labor costs, operators save 8-12 manager hours per location per week previously spent on manual tip calculations, that's $18,000-$31,000 annually per location in recovered productivity. On compliance, manual tip pooling errors create DOL audit exposure and employee lawsuits. Our patent-protected algorithms automatically validate every distribution against federal and state regulations, creating audit trails that reduce legal risk. On retention, when employees receive accurate, instant tip payouts through our mobile app, turnover drops 27-36%, saving $5,000-$7,500 per prevented departure in recruiting and training costs. For a 50-location operator, that's $450,000-$1.5M in annual savings. Implementation takes 30-45 days because we've standardized the process across 14,000+ locations. The system integrates with existing POS and payroll providers without disrupting operations, so operators see ROI within the first pay cycle.

Q: How do you see payment technology evolving for the hospitality workforce over the next five years?

Aleks: The hospitality workforce is shifting from bi-weekly paychecks to on-demand earnings access. Gen Z employees, now the majority of restaurant workers, expect instant access to earned wages, mobile-first transparency into how pay was calculated, and choice in payout timing and destination. We adapted by integrating with eight payment partners including DailyPay, Branch, Instant, and Visa Direct, giving employees same-day access to tips. Our mobile app shows transaction-level detail before payroll closes. Over the next five years, we'll see three major shifts. First, instant payouts become table stakes, employees won't accept jobs without this capability. Second, payment systems become retention tools, not just operational infrastructure. Third, AI-driven compliance automation becomes mandatory as regulations grow more complex across jurisdictions. Companies that build payment infrastructure today around these expectations will have massive competitive advantage in hiring and retention. Those still using spreadsheets in 2030 won't be competitive. The technology we pioneered in 2013 is becoming the baseline expectation for an entire generation entering the workforce.