If you go out to a bar or restaurant and receive good service you may choose to leave a tip. You’d expect that the person serving you would get to keep the tip as a bonus on top of their wages, or perhaps that staff would share the tips between them. However, in many workplaces this is no longer the case.
Some employers have started to take a proportion or even all of their employees’ tips as part of the business’s profits. This is particularly prevalent in companies which accept tips via card payments.
People often wonder about the mysterious ‘service charge’ that appears on some bills and what it is for, but I think people would be uncomfortable at the thought that this isn’t being passed on to hardworking waiting staff.
We should be able to confidently reward good service with thanks and know that this is going to the right people. I think these companies need to be open and honest with their customers.
The Government’s Business Department launched a very welcome consultation into these practices. However that consultation ended more than a year ago and they have not published the results or come forward with any proposals.
I am backing an Early Day Motion in Parliament urging Government Ministers to publish this consultation and give assurance to hospitality workers that their concerns will be addressed.
Watch workers talk about their experiences in this video: www.youtube.com/watch?v=fYcqLYbKrsw
Facts on unfair tips
Employers hold onto staff tips in all kinds of ways, often without customers’ knowledge including:
1. Charging a fee – employers taking a cut from customer tips paid on a credit or debit card as an administration fee. Typically between 8%-15%.
2. Charging waiters to work – deducting a percentage of between 2%-3% from waiting staff table sales. If staff don’t make enough money in tips to cover the levy, then it comes out of their wages.
3. Employers pocketing entire or hefty chunk of the ‘optional’ service charge that increasing numbers of restaurants are automatically adding to customer bills, instead of giving it to staff. Typically between 10%-15%.
4. Using tips and service charge payments to cover the cost of breakages, till shortages, customers doing a runner, paying credit card transaction fees or quite simply to boost their own profits. They could even be used to boost senior managers’ wages.
5. Bogus tronc schemes – a properly run tronc scheme – a pooling system used by employers to distribute non-cash tips to employees -should be genuinely independent, free from employer interference and involve staff. But many aren’t – too often staff get no say in how non-cash tips and service charge are shared out or who get a share.