Industry • Best Practice
To Tip or Not to Tip: Navigating Gratuities at Medspas
Apr.04,2023By Boulevard Staff
Medspas that take gratuities walk a thin line between accepting thanks and breaking the law
It’s common practice to tip estheticians, and as a result, many clients want to do the same for their aestheticians. As good as it would feel for your medspa staff to accept a gratuity in recognition of their outstanding service, they shouldn’t. In short, it’s not acceptable — accepting tips can have serious consequences, including being stripped of your medical license. Here’s what you need to know.
Should my medspa accept tips?
Generally speaking, medspa professionals shouldn’t accept or ask for tips from their clients, because medspas are medical offices and are typically owned by physicians. As such, these businesses are subject to fee-splitting and kickback regulations that limit who can receive payments for medical procedures. Accepting payment outside the carefully regulated bounds of medicine — a tip, for example — is at best an ethically gray area and at worst is flat-out illegal. Even gratuities meant to show appreciation for nonmedical professionals, like receptionists, can be seen as a workaround to give a doctor additional money, and are thus not worth the risk.
It doesn’t matter if both parties agree to exchange gratuity; an outside body will likely investigate the incident. Typically, that third party is the state medical board, though some states handle complaints through separate governmental bodies. For example, Texas Health and Human Services handles violation investigations in the Lone Star State.
The difficulty of accepting gratuity stems from the general language used in most state medical regulations. Gratuity can be considered an unreasonable charge or crossing a professional boundary, which states typically prohibit. That language is largely open to interpretation and varies between states, though, which makes it difficult to pin down precisely how frowned upon accepting gratuity is. The American Med Spa Association has a complete list of regulations by state, however, they are restricted for non-members.
Like all medical practices, ambiguity doesn’t do anyone any favors. Because of the generalized language of each state’s legal restrictions and the severity of repercussions, it’s not advisable to accept gratuity in a medspa setting.
Additional considerations of medspa gratuity
As with any legal language, there are exceptions, exclusions, and additional clauses that you need to be aware of depending on your medspa’s situation. For instance, medspas that offer traditional spa services on top of medical procedures are a notable grey area. In those circumstances, non-medical practitioners may have valid reasons to expect gratuity for their services. However, accepting tips in these circumstances can still result in legal trouble, as they may violate the aforementioned fee-splitting or kickback regulations. Those regulations govern how fees — including tips — may be counted as referrals to or from a physician, which most states prohibit.
The kickback and fee-splitting rules are yet another area where the legal consequences differ between states. As with the potential medical violations, it’s advisable to review the regulations at a state level to determine how accepting tips for standard spa services will affect your business. Each state has exceptions that further muddy the legal waters. For instance, some states make exceptions for “bona fide employees.” But in medspas, employees may be independent contractors rather than full employees. That could cause trouble if the state opens an investigation against your medspa.
Gratuity, clients, employees, and you
You’ve got a business with lots of clients and hard-working employees. It’s understandable that you’d want to permit gratuities in your medspa to keep everyone happy. However, it’s imperative that you train your employees to decline tips gracefully. Clients that want to give a gratuity may take offense if employees decline it, so it needs to be done with care. Additionally, employees need to understand the repercussions of accepting tips. These considerations have to be embedded in the company’s culture.
When an employee declines a tip, they should do so politely while offering an explanation of why they can’t accept. Clients can misconstrue curt responses, which can lead to a misunderstanding of why their money is being declined. The client may assume that you, the business owner, are keeping employees from accepting the tips they’ve earned, the optics of which are negative. They may also find the situation otherwise “disrespectful” if it isn’t handled tactfully.
Set the expectation with new employees that tips aren’t part of the job, ideally during the interview process. In medspas that offer traditional spa services, employees may expect to earn tips as part of their compensation package, especially if they’re coming from a day spa background. Being mindful to set appropriate expectations — along with an explanation of why — will prevent resentment from rising later.
It makes sense that you’d want to take accept gratuities for the services you perform, especially from clients who are offering it willingly. After all, you work hard and it’s a standard practice in many industries. But you must ensure that you’re in compliance with all relevant legislation to continue practicing, and accepting tips puts that into jeopardy. For that reason, it’s best to skip the gratuity and let clients say thanks in other ways, like leaving positive reviews.