Restaurants and bars have long since been banned from using tips to top up staff’s minimum wage, but what really happens to tips after you leave the table?
When you leave a tip in High Street restaurants where does it really go? Diners and drinkers who intend to reward servers for their efforts – rather than line restaurant owners’ pockets – also initially raised a glass to the changes over five years ago, however, when put under the spotlight the ruling left many unsatisfied.
The changes only exclude tips from a basic minimum wage, making no mention of the sought-after tip transparency that would force restaurants to give 100% of gratuities to staff.
Unite, the largest union in the UK, says: ‘Money left as a tip on a credit card, or paid as a service charge on a menu, is legally the property of the employer to dispose of as they wish.
‘Bad employers use this as an opportunity to take a cut of waiters’ tips and only pass on a proportion back to them. Just because it is allowed doesn’t mean you have to do it. Waiters should be entitled to 100% of tips left for them.’
Unite is continuing its ‘Fair Tips’ campaign, aimed at increased transparency and encouraging employers to end bad practices.
So, with a successful conclusion still some way off, lets takes a closer look at the High Street’s leading restaurant chains and their tip policies…
Doesn’t automatically add a service charge to the bill but encourages customers to leave tips for staff.
100% of tip money goes directly to the member of staff that served your table.
All tips are a bonus on top of a minimum wage that is paid separately.
Back of house staff are paid a slightly elevated rate in the interest of fairness.
What this means; Be confident leaving either a credit card or cash tip in Pizza Hut. All of it will go to the waiter or waitress that served your table.
All of the tips and gratuities, whether cash, cheque or credit card, left by customers go to the staff and are shared on a basis agreed by the staff.
No deductions are made from tips or gratuities, other than tax where required by law.
Wagamama always pays national minimum wage or higher and does not use tips or gratuities to top wages up. Also, no mandatory service charge is imposed.
What this means; Yes, tipping in Wagamama is fine, but be aware that your tip will not reward your table’s waiter or waitress specifically.
(Café Rouge, Bella Italia, Strada, Ortega, Brasseries)
Tragus Group restaurants, including Café Rouge, Strada and Bella Italia, have been accused of paying a basic rate of less than the minimum wage, making the rest up with customers’ tips. The group declined to comment on the nature of their practice. Strada automatically adds a discretionary service charge to customer’s bills.
PizzaExpress has never used tips to make up a minimum wage. All staff are paid at least minimum wage before tips. All cash tips go straight to the waiters or waitresses. However, PizzaExpress does take an administrative charge of 8% on all credit card tips. The restaurant employs a ‘tronc’ (a system that manages tips and their tax), and insists the 8% ‘covers the costs incurred for running the tronc and not, as implied previously, to generate additional profit for the company.’
What this means;
PizzaExpress is doing nothing wrong by law, and even argues its ‘tronc’ system benefits employees tax-wise in the long run. But if you want to see all of your tip go to the staff, leave it in cash.
ASK & Zizzi
All cash tips go straight to the waiting staff and it is their responsibility to ensure these are taxed.
Ask and Zizzi also use a ‘tronc’ system for credit card gratuities in the same way and for the same reasons given by PizzaExpress, a sister restaurant.
The restaurants claim that there is no limit to the amount of gratuity allocated to an employee after the administration fee is deducted.
This is Money says: The same rules apply for Ask and Zizzi as outlined for PizzaExpress above. Always try to tip using cash.
What financial crisis?
While we feels the pinch, see how the other half live!
What do you do in your restaurant?