Hospitality Today July-Aug 2016 - Page 14

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.”