14
| Hospitality Today | June/July 2016
Spotlight
on service
charges
and tipping
The Government has published a
consultation paper on the future of tipping
practices in the hospitality sector. The
consultation, which runs until 27 June, is in
response to concerns that pubs, restaurants
and hotels are not being completely
transparent over their treatment of tips.
The Government believes that all
discretionary payments should be subject
to three broad objectives – they should be:
Discretionary – clear to consumers
• that
they are voluntary;
• Received by workers; and
and transparent so that
• Clear
consumers and workers know how
the payments are treated.
The consultation follows concerns that
tips do not always reach the workers they
are intended for and confusion amongst
consumers about tipping and other charges,
for example a service charge suggested by
the business to the consumer on a bill.
“The issue of tips and service charges and
how they are distributed is often a source
of contention for employers, workers and
consumers alike.
“Several well-known restaurant groups
have been criticised for taking a percentage
of staff tips before their distribution to staff,
charging workers a sales charge based on
a percentage of sales made during a shift
which is to be paid from the discretionary
service charge, and keeping the entire
service charge.
“The Government is considering putting
its current voluntary Code of Practice on
tipping practices onto a statutory basis.
Whether this will achieve the Government’s
objectives remains to be seen, but any
change which clarifies the current situation
should be welcomed.”
One possible outcome, says law firm
Howard Kennedy, is that businesses could
be prevented from suggesting to consumers
Christie continues: “The consultation is
a specific amount as a discretionary
open until 27 June 2016, so the hospitality
service charge.
and other affected sectors have time to
Lydia Christie, a Senior Associate in
reflect upon current tipping practices and
Howard Kennedy’s employment team said: suggest changes that will be positive for all.”