Gaucho responds to slashing waiters’ share of service charge

Argentinian steakhouse chain Gaucho has responded to claims that its new service charge system boosts the wages of its head office staff at the expense of its waiters.

According to a letter from Gaucho’s troncmaster seen by The Guardian, from 1 October, existing waiters have received between 25.45% and 29.4% of the service charge collected at tables they have served, down from 37% previously.

Bar staff will get 17% of the service charge, down from 20%, while newly employed waiters will receive just 17%.

Gaucho’s service charge distributor, WMT Troncmaster, said that the fee would be shared with “staff located at non-public places of business such as head office and central production units”, according to the paper.

The Guardian reported that staff had not been consulted about the changes to service charge distribution and had not received clear answers to questions about what would happen to the leftover cash.

A spokesperson for Gaucho said: “The new tronc distribution has been set by the independent Troncmaster following industry benchmarking across our Gaucho employees.

“The new distribution takes into consideration all our front and back of house colleagues. It is an equitable solution for all of our excellent people. The employee costs borne by the Gaucho business remain as before and the business itself does not benefit in any way from the amended Tronc system.”

It is believed the changes were made in response to comments made in exit interviews by members of other site-based teams, which were heard as part of a broader benchmarking exercise carried out by Gaucho & WMT.

The Caterer understands the changes will ultimately impact the pay of waiters as Gaucho seeks to even out pay across all of its staff.

The controversy comes after the Employment (Allocation of Tips) Act came into force in October 2024, which requires staff to receive 100% of the money they earn through tips and service charge.

Under the terms of the act, operators must pay all tips to employees by the end of the month following when they were received and pay tips to employees at the place of work where the tip was received, rather than sharing them across a group.

Gaucho was founded at Swallow Street Piccadilly, London, in 1994 and has since expanded into a portfolio of 20 restaurants, predominantly London-based but with regional outposts across England, Scotland and Wales.

The steakhouse chain was acquired out of administration by Investec Bank and SC Lowy in October 2018 and in 2019 was joined by M Restaurants.

The two brands created Rare Restaurants, with Martin Williams as chief executive, who has since been replaced by the former Ivy Collection chief executive Baton Berisha.