The government has come under renewed pressure to crack down on restaurants that ask waiters to hand over some or all of their tips. As restaurateurs feel the pinch from a combination of the rise in the national minimum wage, increased competition and flagging consumer spending, there is concern that some are using a variety of methods to withhold tips from staff.
These include: requiring waiters to pay a percentage of the sales they have generated back to pay other staff; persuading all staff to cut their wage rate to the legal minimum and make up the difference using tips; and asking waiters to hand over some of their tips to kitchen staff in lieu of the latter receiving a wage rise.
These requirements appear to be still prevalent nearly two years after the completion of a government consultation on proposals to tackle such practices, partly prompted by revelations in the Observer and other media.
The first phase of the consultation concluded that there is “broad agreement that intervention is required to improve the treatment and transparency of these payments [tips]”. Yet the government says its action on tipping is still “under consideration”.
Dave Turnbull, Unite’s regional officer, who has been campaigning on unfair tipping, said employers were “exploiting the space afforded to them by the government’s failure to act”.
In 2015, the Caribbean restaurant chain Turtle Bay was revealed by the Observer to be requiring its waiting staff to pay a levy of 3% of the sales generated at the tables they served in some circumstances. It is allegedly continuing the practice even after public and political pressure for change.
One former employee of the 44-restaurant business said that if they did not make enough in tips to cover the 3% charge, or if there were incidents of diners walking out without paying, waiting staff would incur “debts to management”. Another former waitress, Francesca Roe, who worked at Turtle Bay in Bristol, told the BBC regional TV show Inside Out West that on two shifts she had not made enough in tips to cover the 3% levy. “I would go in and say to the manager, ‘Look, I’ve not made enough’,” she told the programme. “But they would say, ‘I’m really sorry but you are going to [have to] get cash and cover it’.”
Turtle Bay’s lawyers said the restaurant’s scheme had recently been “audited and sanctioned by HMRC” and complied with industry practice. They added that the 3% levy was only payable if enough tips were earned to cover it and was capped, leaving staff with most of their tips.
Staff were only asked to cover the cost in “circumstances where the employee has been found to be negligent” and diners walked out or otherwise underpaid. They said the restaurant had never required staff to make up any shortfall for the 3% table levy in cash immediately.
Aqua, a seven-outlet Bristol-based chain, operates the same table levy system, as previously reported by the Bristol Post. One member of that chain’s staff confirmed to the Observer that it continued to operate and added: “All staff are pretty happy working here. There’s a charge but we are not the only ones that do it.” Aqua did not respond to requests for comment.
In February, a row over tipping erupted at TGI Fridays, the American restaurant chain, following a proposal to redistribute card payment tips from waiters to kitchen staff in lieu of a wage increase. And at the end of last year, workers at London’s Devonshire Club were asked to take a formal pay cut that would reduce their earnings to the level of the legal minimum wage. They were promised that their total pay would be topped up using service charges automatically added to customers’ bills and distributed via a system called a tronc.
The TUC’s general secretary, Frances O’Grady, said: “The government has failed to deliver on its promise to crack down on bad tipping practices. The only fair tips policy is one where 100% of all customer tips go to the staff with no deductions by the employer.”
