The Great Restaurant Tipping Debate: How Do You Split Yours?
The revelations that several major restaurant chains have not been clear when it comes to splitting servers’ tips among its staff have only added fuel to the tipping debate fire. Today we’re taking a closer look at both sides of the discussion that has been dividing restaurant owners, waiting staff and customers alike.
Tipping practices hitting the headlines
The furore over restaurant policies for tip splitting heated up over summer when the Observer ran an exposé that highlighted seemingly unfair distribution methods used by some of the major restaurant chains. Las Iguanas and Turtle Bay were highlighted for deducting three per cent of table sales from waiting staff’s wages. Gaucho was also cited as taking 16 per cent of tips to put towards staff incentives and competitions and a further 2.3 per cent to share among the non-waiting staff.
Other chains were also blasted for taking a percentage of tips paid on cards as a payment for administration costs - including Pizza Express. Following much attention in the media, Las Iguanas updated its policy so that staff members receive 100 per cent of tips, and Pizza Express ended its admin fee on tips paid by card on October 6th.
The rules and regulations
In the UK, is illegal for tips and gratuities to be used to supplement wages in order to meet the national minimum wage. However, there’s no legislation around the sharing of tips among restaurant staff; instead there’s a voluntary code that was introduced under the Labour government which recommends that you display your server tipping distribution policy clearly to customers.
Many businesses choose to distribute tips paid through a central pool, often known as a ‘tronc’ (from the French term ‘tronc de pouvres’, meaning ‘poor box’!), which allows people such as kitchen staff, bar staff and door staff to gain a cut of the tips rather than them going all to the waiting staff; others deem it appropriate to levy an admin fee for calculating and organising the split of tips paid by customers on card. HMRC has a handy guide on tronc here, and paying tax on tips here. It has been suggested that admin fees could be capped, however, the union Unite argues that this would encourage admin fees to be more widely applied. So, what are the options for you and your staff?
The tip distribution conundrum
The main focus of the waitstaff tipping debate has been on transparency in tipping policies. As Business Secretary Sajid Javid has said, “When a diner leaves a tip, they rightly expect it to go to staff. In full.”
A customer would probably assume that their money might not go entirely to their waiter or waitress and may be shared between all of the staff on shift, which is part of recognising the value of all employee’s involvement in the dining experience. If some of the tip they are giving is being retained by the business though, they ought to be made aware in advance. In addition, staff need to be aware of the policy, so that they can agree to adhere to it and to be able to explain it to customers if necessary.
To tip or not to tip?
Unless there’s a stated service charge, customers are under no obligation to tip in the UK, though the convention is to leave 10 per cent of the total bill unless service is bad. However, the necessity of tipping is a question that divides (as well as unites) both customers and those within the industry.
On one hand, it rewards and recognises a positive service experience, but on the other it can be seen as a way for customers - and by default employers - to withhold pay on the condition that exceptional service is delivered. As we’ve already mentioned, although it’s illegal to ‘top-up’ wages with tips, they are seen as a bonus or a boost to what can be a low hourly wage, though many of the companies who have in the past or continue to take a percentage of their servers tips would argue that they already pay staff well and above the minimum rate. And then at the very end of the tipping spectrum there are some lucky waiting staff in certain restaurants who receive tips at a level that far exceeds their usual hourly rate – should this success be shared around, or seen as a well-deserved reward for them doing a fantastic customer service job that not everyone can, or wants to do?
Tipping overseas
It’s not just us Brits who are taking stock on our tipping policies at the moment. Even in the US there have been recent eruptions with one New York chain, The Union Square Hospitality Group, making headlines after announcing they’d end tipping in their restaurants.
In the US tipping has long been an even bigger part of dining out though there are now factions who are working towards putting higher hourly wages in place instead. This may well mean bumping up the cost of items on the menu for customers. In a country where tipping is seemingly a dining institution, potentially revolutionary changes are being made.
Where do you stand on the Great Tipping Debate? Does the subject divide your staff? Is an admin charge on credit or debit card tips really necessary? We’d love to hear your views and your reaction to the government inquiry, so leave us a comment below.
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