Leader: Let's be clearer with staff and customers regarding service charge and tips

03 September 2015 by
Leader: Let's be clearer with staff and customers regarding service charge and tips

London Evening Standard that found that a proportion of the service charge in some restaurants was being spent on administrative costs - will no doubt be met with mixed emotions from the industry.

While customers will largely be under the impression that discretionary service charges on their meal will find their way to the waiting staff, it's not uncommon for restaurant operators to deduct administrative charges to cover additional payroll, tronc software, tronc experts, walkouts, breakages and discrepancies in the till, among other things.

On top of that, policies vary from restaurant to restaurant: some split the remainder of the service charge among front of house only, while others prefer to include the back of house team as well. Both are arguably fair.

Where things get really murky, however, is cash tips - and this is clearly an area where operators should never get involved.

The only way for businesses to avoid being hauled over the coals by my colleagues in the mainstream press (some of whom don't appear to know the difference between tips and service charge) is to adopt the (former) government's Code of Best Practice on Service Charges, Tips, Gratuities and Cover Charges.

We believe that there are legitimate costs in running a business - ones that don't cross the minds of Joe Public, the Government or the unions. The industry shouldn't shy away from educating customers and staff about unseen overheads.

As hospitality experts, you know better than any the importance of managing expectations. But the industry has fallen straight into the hands of the press and the unions by not being clearer to customers - and in some cases even staff - about where the money goes. If you want to look to a clear disclaimer, visit Zizzi's website.

As Hawksmoor and Foxlow co-founder Will Beckett told The Caterer last week, it's time for restaurateurs to be transparent before these service charge stories damage the industry further. Many operators are claiming that we are facing a skills crisis, and many of you tell us how hard it is to persuade parents to let their precious sons or daughters join this glorious industry.

Well, if those parents think their little soldier is going to sign up to do long hours for low pay and then have money which they believe is theirs disappear into an abyss, the industry will struggle to recruit, full stop.

It may be too late to stop the Government from getting involved, but if the industry doesn't self-regulate on this matter quickly, the taxman will be breathing down its neck - and those of its employees, personally liable for declaring their cash tips - faster than you can say Jack Robinson. And in that situation, I suspect there will only be one real winner.

Amanda Afiya, editor, The Caterer

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