Change Welcomes Proposed Service Charge Legislation

The Change Group, has welcomed Theresa May’s announcement of new legislation that will make it illegal for restaurants to keep service charge income, ensuring that it is all passed down to employees.

While some employers keep a percentage of the service charge as an administration fee or to offset fees from credit card companies, it is recognised that service charges or tips play a significant part in topping up the wages of hospitality workers.

In its most recent survey of people working in hospitality, we found that one in four respondents (24%) said that they did not did not receive gratuities. Of those who did receive gratuities, one in eight (12%) said that this amounted to between 20% and 30% of their salary, while 18% said that it added up to between 10 %and 20% of their pay. Around a quarter (24%) said that the gratuity represented less than 5% of their remuneration.

“Pay is vital to attracting and retaining employees,” said Craig Allen, The Change Group co-founder and director. “The hospitality industry needs to do everything it can to ensure employees are treated fairly, especially with the current candidate shortage, and the prospect of this tightening with a no deal Brexit – or one where there is restricted movement for EU citizens.

“Customers assume that service charges are passed onto employees, so withholding gratuities from staff is a potential PR bombshell. While there are a small number of hospitality employers who have made a case for doing so, there are many more who agree that service charges belong to staff.”

With the growing scrutiny over the lack of transparency in restaurants over tipping policies, the new legislation coming into place will ensure workers get the tips they deserve and give consumers faith that the money they leave to reward good service is going to the staff, as they intended.

Luxury Hospitality Recruitment

The Change Group source superior permanent and temporary staff for some of the best-known restaurants, bars, bistros and hotels in London.

We have an array of positions available so if you’re looking for a new hospitality job, please submit your CV online to register with The Change Group.

Alternatively, if you’re looking to hire Front of House, Back of House or Business and Commercial staff, we have an array of exceptionally talented staff that would easily slot into your business. Please contact us on 020 7923 6021.