During the summer there was a flurry of media interest in tips and service charges and the extent to which restaurant chains make deductions from them before passing them on to staff. A number of well-known chains were reported to keep as much as 10% of some tips to cover ‘administrative charges’, which is considered by many to be unfair.
Following these reports, the Department for Business, Innovation and Skills (BIS) has now launched an investigation into how tips, gratuities and service charges are collected by employers and the extent to which deductions are made from them before passing them on to employees.
When launching the investigation, the Business Secretary, Sajid Javid, said:
“When a diner leaves a tip, they rightly expect it to go to staff. In full. I’m concerned about recent reports, suggesting some restaurants pocket tips for themselves. That’s just not right.
I’ve ordered an immediate investigation to look at the evidence and consider the views of employees, customers and the industry to see how we can deal with the abuse of tipping.”
The investigation has commenced with a ‘Call for Evidence’, inviting employers in the hospitality industry and other key stakeholders to explain how they deal with the variety of tips and service charges which are received, either in cash or other form of payment. BIS will then consider the evidence gathered and decide whether Government intervention is necessary to strengthen the voluntary code of practice currently in place.
This is a great opportunity for responsible employers in the hospitality industry to influence government policy on this issue, so we encourage you to participate in the investigation. Responses are due by 10 November 2015, which doesn’t leave a great deal of time. Those who wish to respond can provide their feedback online or complete a hard copy form which you can find here.