Ping Pong trials 15% 'brand charge' ahead of changes to tipping law
London restaurant chain Ping Pong has raised staff wages and replaced its service charge with a 15% discretionary ‘brand charge' to cover extra costs.
The dim sum group said it had chosen to act ahead of a new law that will require hospitality companies to pay staff all money left to them in tips from July.
It said the "fairer" wage structure would give staff greater financial stability compared to the seasonal nature of tips.
Ping Pong's menus now state: "A discretionary brand charge of 15% is added to your bill. This covers additional costs associated with operating a franchised brand and delivering the dining experience to brand standards.
"This charge will eventually be incorporated into the menu prices and will not be charged for separately."
The company said staff had received a pay rise from April so their earnings matched what "they would have received with service charge distribution".
The Caterer understands the lowest paid restaurant employee is now on £12.64 an hour, up from £10.42, while the highest hourly paid rate has risen to £14.84.
It comes after the National Living Wage rose on 1 April from £10.42 to £11.44 an hour.
A statement from chief executive Art Sagiryan on behalf of Ping Pong's directors said: "With a fairer wage structure in place, our customers should not pay any extra service charge or tips. To achieve this change, we need to increase revenue by 15%.
"In this initial trial phase this increase was introduced through discretionary brand charge. Instead of implementing price increases as part of our core menu, we wanted to give our customers some flexibility by creating a new discretionary charge."
Several Ping Pong customers have taken to TripAdvisor to complain about the charge since it was introduced.
The restaurant group said it was "one of the first in the sector to proactively address the upcoming legislative changes" and would use the next two months to consult with customers and review feedback over the changes.
A final decision on whether to include a mandatory brand charge, increase product prices, or a combination of both, will be made ahead of the launch of its June menu.
If you have concerns around the upcoming tipping legislation, join The Caterer's free Tipping and Payment Summit on Thursday 18 April. Sign up to hear our expert panel will discuss everything you need to know about the new tipping legislation.
