British Columbia Restaurants Face Financial Crisis as Third-Party Tip Processor Halts Payouts

British Columbia - Ekhbary News Agency

British Columbia Restaurants Face Financial Crisis as Third-Party Tip Processor Halts Payouts

The hospitality sector in British Columbia is currently embroiled in a deepening financial crisis as numerous restaurants report that a third-party payment processor, Everyday Payments, has abruptly halted the distribution of employee tips and wages. This sudden cessation of payouts, attributed by the company to an unspecified "compliance issue," has left businesses thousands, and in some cases, potentially millions of dollars short, threatening their ability to meet payroll and operational expenses.

Everyday Payments markets itself as a solution for "delivering real-time employee payouts," a service designed to simplify fund management for businesses across various sectors, including hospitality, food service, beauty, wellness, and commission-based industries. The company's platform, leveraging "AnyDay," promises a powerful employer portal, a flexible mobile app, and payment cards for employees, aiming to improve visibility, control, and ensure "faster, more predictable access to earnings." However, the reality on the ground for many B.C. restaurateurs has become anything but predictable.

Eric Griffith, owner of Alta Bistro and Alpha Cafe in Whistler, recounted to Ekhbary News Agency the moment he realized something was amiss. Logging into the system last Wednesday morning, he was immediately struck by an irregularity. "I thought, 'OK, this has to just be an error. They’ll resolve it. They must know that this has happened,'” Griffith explained. Yet, attempts to contact support yielded no response until the weekend, leaving him and other business owners in a state of growing anxiety. It soon became clear that Griffith was not alone in his predicament, as fellow restaurateurs began experiencing similar issues.

By Monday, the company issued a press release, which was also emailed to affected businesses, vaguely referencing a "compliance issue" and an ongoing "reconciliation" process. However, this statement provided little comfort or clarity. "No answers to any questions as to why this happened," Griffith lamented, expressing the industry's collective frustration. "What is the intention? When is the money coming back?" These fundamental questions remain unanswered, leaving businesses in a critical state of limbo.

For many, like Griffith, embracing third-party solutions such as Everyday Payments was a strategic decision aimed at streamlining operations. The system promised to save time on administrative tasks and meticulously track staff tips and wages, freeing up valuable resources for business owners. "This piece of technology was very useful and working well, absolutely well," Griffith affirmed, highlighting the initial success and convenience it offered. "The staff were happy. I was happy because I was saving time, and also it was just easy." This abrupt failure has not only erased those efficiencies but introduced profound operational paralysis.

The financial impact is immediate and severe. Griffith articulated the cascading effect: "If it’s 5,000 to me and it’s $100,000 to someone else, it’s still like relative impact, right, which is ultimately hurting the business, the ability for the owners and businesses to pay the staff, and then, I mean, for me, it comes down to paying my suppliers and other things, right?" He added grimly, "That money becomes a hole, right? So, yeah, I don’t want to think." The sentiment underscores the precarious nature of small business finances, where unexpected shortfalls can quickly spiral into existential threats.

Matthew Upton, co-owner of The Broken Seal restaurant in Squamish, revealed his establishment is missing a staggering $12,000. "That’s over two weeks’ worth of payroll. It’s half of what our ends is. It’s a huge effect for us." Upton described a harrowing week spent fruitlessly attempting to reach Everyday Payments, enduring four-hour holds on Friday, Saturday, and Sunday before finally receiving a response on Monday. His frustration echoes across the sector. "The hospitality industry is not an easy industry to be in, and when there’s unknowns, we have such small margins, so keeping as much money in our bank account is the most important thing. So when you have large amounts come out, it’s definitely daunting, for sure."

The problem is not isolated. Ian Tostenson, president and CEO of the BC Restaurant & Foodservices Association, confirmed that he has received numerous reports of similar issues from restaurants throughout the province. "I have just read two emails in the last five minutes," he told Ekhbary News Agency, citing one restaurant group that lost $50,000 and another $15,000, located in Prince George and Vancouver, respectively. Tostenson highlighted an especially alarming case involving a Vancouver restaurant where nearly a million dollars was reportedly held back from the "wallet" managed by Everyday Payments for employee gratuities.

“This is really, really serious, and there’s a lot of concern in the industry, because these funds go into a third party for the purposes of paying out and distribute the gratuities to our hard-working employees,” Tostenson emphasized. The core issue revolves around trust and the security of funds entrusted to an external entity. The company's failure to communicate transparently or provide a clear timeline for resolution exacerbates the crisis, leaving restaurants scrambling to find alternative ways to pay their staff and maintain operations. This incident casts a long shadow over the future of third-party payment solutions in the service industry, prompting urgent questions about oversight, regulation, and the safeguarding of employee earnings.

Ekhbary News Agency