Service charge

Service charge: Staff at many restaurants fear tips will go down

Waiters, chefs and other restaurant workers have expressed their displeasure at the decision to ban the collection of service charges, with many saying they will ‘demand a raise’ from owners to make up for the loss and others fearing that even tips given by customers are goodwill “may now decline”.

Prakash Singh Koranga, 27, from Uttarakhand, a chef who works at a popular Moti Mahal Deluxe franchise restaurant in South Delhi, said the service charge which is split proportionally among the staff acts as a ” additional income” and “an incentive also to give our best at work”.

“I have been in this industry for about five years now. As a chef, I will continue to cook the best meals I can for the guests, but the decision has affected our morale as now we would have to make do with our salary alone. Is it possible to survive in this time of inflation on only a salary of Rs 14,000. We will have to follow the new standards so I will ask my employer for a salary increase to compensate,” he told PTI .

Fellow food and dining chef Naveen Pandey, who worked for the famed chain for 18 years, echoed her sentiments.

“I might even change places (restaurant) with better prospects, if they don’t raise my salary,” said Delhi-born Pandey.

Amid mounting consumer complaints, the Central Consumer Protection Authority (CCPA) on Monday banned hotels and restaurants from levying service charges automatically or by default on food bills and allowed customers to file complaints if of violation.

The decision drew mixed reactions from hoteliers, restaurateurs and associations across India, some of whom said the decision ‘won’t impact’ their business, while others feared impact on their income and cause dissatisfaction among their staff, who have been accustomed to receiving their share of the service charge each month until now.

Chefs, servers, kitchen staff form the backbone of a catering business with a few office workers or a manager running the day to day operations. Staff at several large and small restaurants, cafes and hotels that PTI spoke to from Delhi to Kolkata and from Mumbai to Chennai said they would have to accept the new standards willy-nilly, but many were adamant that that they would not pay with their existing salary. .

In Kolkata, top restaurant brands include Mocambo, Peter Cat and the nearly century-old Aminia.

A waiter, employed at an Aminia outlet in the New Market area, on condition of anonymity, said: “I receive an average of 1,000 to 1,500 rupees from customers every day (in tips). We never ask but there are many who place an extra note of Rs 50-100 with the bill and wave to us not to return it.I don’t know if tipping will be prohibited in the name of disposal service charge .

There is no service charge calculated when billing Aminia. But can customer tips be stopped? Will it now be called illegal, he asked.

Suvendu Porel, server at Peter Cat, also said that many customers personally tip, happy with the service and the food, and do so as they wish.

In Connaught Place in central Delhi are a number of great restaurants and classy cafes. In South Delhi, a staff member at Green Sky Cafe, which serves Korean food with BTS boy band music playing in the background, said: “We don’t charge service tax, so the decision won’t affect us.”

“I do the dishes. I have worked in this restaurant for 25 years. My salary is very less to feed a family of five in a city like Delhi. We used to get a bit of a break on the service charge .I used to get my share of 1800-2000 rupees per month in service charge.The money helped me to pay for small expenses like bus pass.It will hit our lives.What is our fault, asked Rajesh (49), a restaurant employee in Connaught Place.

Many hoteliers, restaurateurs and associations, across India, have also highlighted the terrible impact that the COVID-19 pandemic has had on the hotel and catering sectors, and raised concerns about the impact this decision would have on the company.

In Mumbai, Maharaja Restaurant Manager and Senior Vice President of Hotel and Restaurant Association of West India (HRAWI), Pradeep Shetty, said: “The restaurant industry was slowly recovering from the disruption caused by the pandemic, during which many workers had left and were engaged in It is very difficult to retain and hire employees in this company and at a time when we were trying to recruit the people who had left the industry, this decision on the service charge made it much less attractive for people to come back. “

Covid had hit this industry “very hard” and this service charge decision “will continue to make it difficult” going forward. “Now as owners it has become very difficult for us and we have to work on it and see how we can compensate our workers,” he added.

Sherry Bhatia, President of HRAWI and General Manager of the Golden Swan Hotel, said no one was forced to pay the service charge and no consumer returned if they refused to pay it.

“The industry expected the enactment of a comprehensive law that would limit the collection of charges on top of the cost of a product or service and would be applicable to all industries,” he added. .

Mr Ravi, a senior member of the Tamil Nadu Hotel Association, said hotels in Chennai and Tamil Nadu do not charge any service fees.

“Some hotels used to charge it because if cutlery was accidentally damaged or broken while consuming food…that cost is recouped. Some money also goes to labor, but it’s shared between departments among the employees,” he told PTI.

Removing service charges would impose additional expenses on hoteliers, he said.

The Kerala Hotel and Restaurants Association (KHRA) said that service charges are not levied on customers by its members.

“Moreover, it is a reward given by a customer if he is satisfied with the service or the quality of the food, and therefore, it is the customer’s choice,” said the chairman of the state committee. of the KHRA, G Jayapal.

“As a result, the directive from the Central Consumer Protection Authority (CCPA) will not affect us,” he added.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)