Service charge

Hospitality bosses call for movement on service fee protections amid labor shortages

Monday, May 16, 2022 11:45 a.m.

As the hospitality industry faces a labor shortage threatening to bring it to its knees, bosses have said legislation to protect workers’ tips could help spruce up its image.

Ministers have promised legal protections for employee tips since 2016. In a separate blow, the Jobs Bill, which is expected to contain this framework, was dropped from the Queen’s Speech earlier this week.

However, the Department for Business, Energy and Industry (BEIS) was still in favor of a rule change.

It comes after companies like Pizza Express and Byron Burgers have made damning headlines in recent years after staff complained that bosses had tried to use a slice of tips to boost the wages of kitchen staff .

Disreputable headlines will do little to whet the appetite of job seekers considering the industry. Some 160,000 positions in pubs and restaurants are vacant, according to UKHospitality.

While the bosses insisted on CityA.M. places taking tips from workers were not rampant, they said a legal framework would ensure staff were taken care of.

“The problem is that, given a system not surrounded by legislation, there will be companies that abuse it,” said Sarah Willingham, boss of London-listed bar group Nightcap. CityA.M.

“I sincerely think that in the whole industry, the majority of people are doing the right thing. The problem is you just have some of these companies giving us a bad name.

For those working in bars and restaurants, money from service charges or tips can be “really big” for individuals, adding a few pounds to their hourly wage.

Job applicants should ask potential employers how the service fee is broken down, Willingham added.

“That in itself would make a difference. That would [those in recruitment positions] Stop and realize that at a time when it is so difficult to recruit and retain, we really care about our people, more than ever.

Even before the pandemic and Brexit, the hospitality industry struggled with recruitment and retention.

“So many people have historically viewed hospitality as fleeting, something to be paid for through college or before you get your ‘good job,'” Willingham added.

“I’ve had a career in hospitality all my life and now I run a £40m business which went public on the London Stock Exchange last year. It’s a real job. »

Although hospitality has traditionally been viewed as having a bad reputation for low pay and exploitative practices, Michael Kill of the Night Time Industries Association (NTIA) said the pandemic has changed perceptions.

“We’ve seen owners take care of their staff to their own detriment,” he said. “I don’t think our industry feels like we treat staff unfairly in any form,” he insisted.

What’s more, wages have soared in recent months amid a tussle between hospitality bosses from a smaller pool of workers.

Almost four in five bar and pub operators (79%) had raised staff pay rates in a bid to woo job applicants and satiate current staff, according to data from UKHospitality and CGA earlier this year.

Still, the lack of movement on long-promised legislation was “very frustrating” for the sector, Kill said.

“A legislative platform would then eradicate any position where the industry can be challenged,” he added.

The lack of haste on the matter stems from staff being “dependent” on tips, all the more so in an environment where the cost of living is skyrocketing to all-time highs, Kill added.

“Workers should definitely get the tips they deserve, and customers should feel confident that their money is rewarding staff for their hard work and good service,” a government spokesperson said. CityA.M. when asked about the future of the muted legislation.

“It is important that this legislation is reviewed, as promised for years, to ensure equal treatment for hospitality workers in the industry,” said Clement Ogbonnaya, owner of the Prince of Peckham. CityA.M.

‘We ensure that tipping is shared equally between all of our staff, but please be aware that this is not always the case with all hospitality businesses,’ the pub operator added.

Under rules promised last autumn, ministers simply said employers would be required to pass on tips to workers without deductions.

However, the operators themselves are divided on how the service fee should be distributed among workers.

Charles Tyler, owner of the Paladar restaurant at Elephant & Castle, said ministers might be right to postpone plans if “more time to think through in detail” was needed to create a level playing field.

Government hesitation and flip-flops on the issue have resulted in a system “clouded in mystery”, with many industry players reluctant to discuss it, Tyler said.

The restaurateur has come out in favor of the French service system, where venues typically add 15% to the bill, leaving diners free to tip workers after particularly good service.

“Is the service just the one who serves you at the table or is it everyone, surely, who does the service aspect?”

“The kitchen porter is just as important as the server, the chef and maybe even the general manager. They are all important,” he said.