Code of practice for restaurant service charges published

21st July 2009, 9:31am

The British Hospitality Association (BHA) has published a Code of Practice, urging restaurants to disclose to customers exactly how they deal with the discretionary service charge and non-cash tips.

The code, drawn up by the BHA after discussion with the Department for Business, says that disclosure should explain how the restaurant distributes the proceeds from the service charge to employees.

Recommendations within the Code suggest that disclosure should at least be a written note available for inspection at each restaurant or hotel restaurant and on the establishment's website if there is one.

It says that disclosure should cover whether an amount is deducted for handling costs (and how much); how the remainder is shared between the restaurant and the employee; and the broad process for distribution.

This should explain, for example, whether the amount is shared between the employees in the restaurant through a system controlled by a representative of the employees.

The BHA is urging restaurants throughout the industry to implement the code in order to make sure that customers are fully aware of how the service charge is distributed in their establishment.

"We've had too little information in the past about the way the service charge is collected, what it is for and who receives it. This has given rise to widespread criticism which has damaged the industry's reputation." says Bob Cotton, chief executive.

"The Code will ensure that restaurants make crystal clear how they distribute the proceeds of the charge, who gets it and what percentage, if any, is kept by the restaurant to cover legitimate costs."

Members of the BHA have already accepted the Code and will be implementing it in time for the introduction of new legislation, which bans the service charge being used to make up the National Minimum Wage, on 1 October this year.

"We are urging all restaurants to follow the code so that disclosure becomes universal practice"

He added that a voluntary code was the preferable option "which I've no doubt government would be keen to introduce if the code is not widely accepted by the industry."

Related Articles:

• 29 Sep 2009 - D&D London ditches service charges in its London restaurants
• 26 Jun 2009 - New code of practice will restore hospitality industry's reputation
• 25 Jun 2009 - 'We must ensure that government takes tourism seriously'
• 25 Jun 2009 - BHA awards commend outstanding service within hospitality industry
• 08 Jun 2009 - Diners are still prepared to leave a tip
• 01 Apr 2009 - Tackling the economic downturn
• 23 Jan 2009 - Staff still cheated out of minimum wage
• 05 Dec 2008 - Compass pulls out of BHA
• 07 Oct 2008 - Hospitality is losing too many talented graduates
• 25 Apr 2008 - U-TURN THREAT TO MINIMUM WAGE

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evelina

04 November 2011 at 12:37pm

Well, I think that code is not widely accepted by the restaurant and wouldn't be until it will be made obligatory. For those who wants to know something more about 'behind the scenes' practice in restaurants I can tell you something about that on my example. In the restaurant where I work on customers' bills appears 12.5% of obligatory service charge. Is written as well than Restaurant have got no profit from the service charge. It is fairly divided between the staff involved in serving you. How it looks in practice? We are getting minimum wage plus 20% of service. Well, it mean than if a customer spend let say £30 on his dinner and we add a service charge (£30x 12.5% = £3.75) equals £33.37 than a waitress gets... How much?

evelina

04 November 2011 at 12:38pm

Well from that £3.75 a 20% is for a supervisor/manager (it's fair because when it's busy they do help us)- £3.75 - 20% = £3, from that there is a VAT taken by dividing it by 1.3 (well it's seems to be 23% not 20% VAT, we don't know why is that way) so £3/1.3 = £2.30. And now we get a 20% from that £2.30 which is £0.46 before tax and NIC. If a service you pay is £10 waitress get £1.23. Well, without taking out VAT there is 60% of service going to the restaurant owner. So I think every should decided his/her self is it fair? Don't forget what is written on the bill - restaurant got no profit from a service charge!

evelina

04 November 2011 at 12:40pm

As well last week our employer took away about £100 form one of my colleague wage (she has been working over 50h very busy shifts) because he decided she has earn to much that week and he will keep those money for next to month when restaurant will be quite after a christmas time so his got money for her wage, he is not going to pay from his pocket. When she said than she doesn't agree to that because she has been working hard all week and has to pay bills as well, he said than he is going to bring her a newspaper where is written than service lawfully belongs to the restaurant means he can do with it whatever he wants.

evelina

04 November 2011 at 12:41pm

I would like to ask customers just for a one thing please don't pay service charge don't go to restaurant where is service charge or refuse to pay service charge it's the way you can help those things to finished keep your money in your pocket unless you want to pay something extra to the owner of a restaurant. I do believe there are restaurant where it works fair, like the ones which accepted BHA's CODE OF PRACTICE

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