Tips, gratuities and pay

2015-08-13 Philip posted:

The issue of waiters’ tips has been in the news recently as Pizza Express has come under pressure to stop taking a percentage of tips paid to staff on credit cards as what it says is a handling fee.

Pizza Express isn’t alone in doing this. Many high-street chains deduct fees from tips. These include: Ask (8%), Belgo (10%), Bella Italia (10%), Café Rouge (10%), Giraffe (10%), Prezzo (10%), Strada (10%) and Zizzi (8%). Other chains, such as Carluccio's, Garfunkel's and Jamie Oliver's restaurants do not deduct a fee.

Most chains use a "tronc" system (from the French “tronc des pauvres” meaning poor box), where all the tips are collected together and distributed evenly through the staff, usually with around 70% going to the waiters, and the rest given to kitchen and other workers.The law is not a great deal of help to employees. Because there is no law regarding how a tronc is divided, there are reports of managers in some restaurants abusing the system to pay themselves as much as they want out of the pot, and then handing over whatever is left to the rest of the staff. There are also reports of restaurants adding a service charge to the bill that is simply kept by the owners without a penny being passed on to the staff - which may be morally questionable, but is not illegal.

Tips, service charges and gratuities paid by customers directly to employees will not form part of the employee's remuneration and cannot be taken into account when deciding whether an employee has been paid the National Minimum Wage. For the same reason, it is unlikely tips would be included when calculating holiday pay.

From 1st October 2015 the National Minimum Wage per hour will be:

Standard adult rate (for those over 21) £6.70

Development rate (aged 18-20) £5.30

Apprenticeship rate (Apprentices under 19) £3.

Young workers rate (aged under 18 and not an apprentice) £3.87

Share this post

Sign Up to Our Newsletter

Share this post

Twitter

And we're out with update 5 - read on for guidance on updates to the furlough scheme and how holiday/annual leave htwitter.com/i/web/status/1…mg

Twitter

There have been some developments on the job retention scheme (the furlough scheme), which has now been extended totwitter.com/i/web/status/1…YB

Twitter

With changes happening on a daily basis due to #COVID19 I've had lots of questions from both employers and employeetwitter.com/i/web/status/1…Nm

Testimonial

I was very pleased with the speed of dealing with my business. From the appointment - which was also made quickly- to the advice given and speed of resolving my issues.

Lynn Harrison

Testimonial

This is the first occasion that I have needed the services of an Employment Solicitor and viewed the prospect with a certain amount of trepidation. I need not have worried. Philip McCabe took me through the process with sympathy and understanding. He gave me sound advice and when needed acted promptly and effectively bringing matters to a successful conclusion. I would recommend his services to anyone.

WG