Restaurants Could Soon Be Banned From Adding A Service Charge To Your Bill...
The Debrief: New laws will demand transparency when it comes to tips and could see restaurants banned from adding a compulsory service charge to bills, but what will this mean for staff?
Last year several well-known and well-regarded eateries were outed for rather unsavoury practice when it came to their tipping policies.
Date night favourite, Côte, for example, was exposed by the Evening Standard for pocketing the entire service charge that they were automatically adding to bills instead of giving it to their staff in tips. The Observer then reported that old reliable Pizza Express had been scandalously taking a slice off of tips to the tune of 8% when a service charged was paid by credit or debit card. They also reported that waiters at some major restaurant chains were even being forced to ‘pay to work’ on some shifts; at Las Iguanas, the home of affordable frozen margaritas, staff were reportedly required to, at the end of their shifts, pay back the company 3% of what they generate on tables.
Since then many of the chains involved in the revelations, including Côte, Las iguanas and Pizza Express have changed their controversial tipping policies. That’s not enough in the Government’s eyes, though. It’s being reported that Business secretary Sajid Javid will publish a nationwide consultation on tipping soon, following an ongoing investigation into tipping policy since last year’s revelations. This will set out the Government’s proposals for the handling of tips.
New laws will demand transparency when it comes to tips and could see restaurants banned from adding a compulsory service charge to bills and make them spell out, clearly, that tipping is always voluntary. Crucially, this crackdown on tipping could see restaurant owners forced to give staff every penny of the tips/service charges that they have earned.
In America there is no question about tipping, forgetting to do it or opting out is an absolute no no. It’s so well known that you tip for everything that it’s written in tourist guides. The reason for this is that American service industry staff get paid such low wages that they rely on tips to make these up. In the UK, however, we don’t really talk about tipping, we don’t really like talking about money full stop. To tip or not to tip, that is the question. Nobody really seems to know how much to tip…it’s is 10% 12.5%?
In this country we have a legally enforced National Minimum Wage, which means most of us can leave a restaurant, café or bar without feeling too guilty about not leaving a huge tip or wondering how much the person who brought us our food was actually being paid.
However, the National Minimum Wage wasn’t actually enough. So, in the last year’s July Budget, Chancellor George Osborne introduced a National Living Wage, set at a rate of £7.20 per hour for all workers aged 25 and older, which became compulsory on April 1 this year. He also set a target of £9 per hour by 2020.
Before the Living Wage came into force, some of the restaurants who were skimming off the top of their employees tips said they were doing so because they couldn’t pay staff what they were required to pay them. Côte, for example, defended itself by saying that the ‘service charge is used to increase the pay of all restaurant level staff’. Under new proposals they’ll no longer be able to get away with such behaviour.
As Business Secretary Javid told The Debrief last year: ‘As far as I'm concerned, tips belong to the staff. I'm getting increasingly concerned about the practice of some restaurants, and will be taking a serious look into the issues raised.’
We’ll wait to see the details of his report. The enforcement of a National Living Wage, the proposed end of compulsory tipping and a ban on restaurants sneakily skimming off their share of service charges is a good thing. However, what remains to be seen is what impact this will have on service staff – waiters, waitresses, bar tenders and baristas alike - whether people will continue to leave tips, as a bonus or reward for good service, in a country which doesn’t really have a culture of doing so.
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