Las Iguanas and Turtle Bay slammed for ‘pay to work' tipping policy

Las Iguanas and Turtle Bay have become the latest restaurant groups to come under fire for their tipping policy after reports that front of house staff are being forced to "pay to work".

The casual dining groups have been slammed for operating a policy that requires staff to pay their employer 3% of the table sales they generate on each shift, or 5.5% for Las Iguanas' London restaurants.

The money is meant to come out of the employee's tips but if they haven't made enough in gratuities, staff are expected to make up the shortfall out of their own pocket, reported TheObserver.

Last week, French-style restaurant chain Côte came under fire after a source claiming to be a current staff member told http://www.standard.co.uk/news/uk/restaurant-chain-c-te-takes-entire-service-charge-instead-of-giving-it-to-staff-a2918366.html" target="_blank" rel="noreferrer">The London Evening Standard

Meanwhile earlier this month, workers' union Unite launched a campaign against PizzaExpress to force the company to scrap its policy of deducting 8% from tips paid to staff on credit cards.

Perry Phillips, London regional officer at the GMB union, described the policy at Latin American restaurant chain Las Iguanas, which has 41 sites in the UK, and the 19-strong Caribbean chain Turtle Bay, as "far worse than that of PizzaExpress".

He said: "The fact that these restaurants are taking money off the waiting staff regardless of the tips they earn is unjust, unfair and downright disgraceful."

According to figures obtained by the Observer relating to one week this year, Las Iguanas took £34,000 from its servers across its UK estate through the sales charge, which, if typical, would equate to £1.8m a year. The casual dining chain said it could not comment on the figures.

A Turtle Bay employment contract, also seen by the Sunday newspaper, said that where tips don't cover the 3% payment, staff "will be required to make up the benefit of any shortfall in the next or subsequent shift, or in the event of leaving the company by a deduction from wages due, such that the deduction does not reduce your effective rate of pay below the minimum wage".

Turtle Bay did not comment on the allegation. In a statement about its tipping policy it said: "The 3% is a calculation on a server's total sales, and in the vast majority of cases customers will leave in excess of 10-15% of their bill as tips. In addition, a 10% service charge is added to all tables of five or more, which the server also keeps. We are not aware of any occasion where a floor server has not earned any tips."

Las Iguanas, whose founder, Ajith Jaya-Wickrema, was also one of the founders of Turtle Bay, was sold last month for an estimated £85m to the Casual Dining Group, which also owns Bella Italia, Café Rouge and Belgo.

The tipping policy across the Casual Dining Group chains is to take 10% of tips paid on cards as an admin fee. The group said no changes had been made to Las Iguanas since it was purchased last month.

Las Iguanas said that although it did charge 3% of sales, it only took this where the tip pot would cover it and that staff never had to pay back money from their wages.

"Our tipping policy has been well-established for around 20 years and, among other things, enables us to ensure that tips generously given by our guests are shared throughout the whole team so everyone feels rewarded," said a spokesman.

"Over many years we have always made our staff very aware of how we distribute and share tips and we believe the vast majority like and accept the approach we take because of the wider benefits they receive."

It has also come to light that Argentine-themed steak restaurant group Gaucho takes 16% of staff tips, which it puts towards "staff incentives and competitions". A further 2.3% is deducted from sales generated by front of house employees to be shared among non-waiting staff.

A Gaucho employee said that in one month they earned close to £500 in tips but, because of a combination of the two deductions, more than £400 of that was retained by the company.

"I am all for sharing with other staff. However, with this new system we are literally coming away with none of our card tips," she said. "This is very unfair as we work very, very hard and we have a very high level of wine knowledge and expertise. Aside from not being justly paid for our knowledge, we have rent to pay and mortgages."

Gaucho said: "The earnings of waiters in Gaucho are well above the industry standard, and waiters in Gaucho share their tips and service with hourly paid kitchen, reception and bar staff on the basis of their seniority and length of service."

Restaurants' tipping policies have always been controversial but appear to have become worse since Labour was ousted from power.

The last Labour government had put in place a voluntary code of practice for restaurants aimed at tackling some of the worst tipping policies, but according to Dave Turnbull, officer for the food and drink sector at trade union Unite, that has since "died a death".

"The coalition came in and did not review the code of practice to see that it was being followed," he said. "That has effectively opened the doors for restaurants to go back and find new ways to extract money from their staff."

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