Waiters at the popular pizza chain last month complained that the restaurant deduct 8% of all tips received in credit card payments. A majority of the waiters in the chains earn the minimum wage, which in the UK is £6.50 an hour, and rely on tips to top up their salary.
Pizza Express issued a statement explaining they use a so-called tronc system – a special pay arrangement used to distribute tips, gratuities and service charges. “The 8% charge is what it costs us to run this. It’s a standard administration charge and we don’t profit from this,” said the statement.
Other chains have been found to take 10% of the service charges – most have pointed to administration charges when defending the practice.
A complicated and mixed picture has been revealed since the Pizza Express story hit the headlines. In many cases where customers have thought they were rewarding staff for good service, their tip – or part of it – has gone to management. Over 9,000 people have signed a petition to call on Pizza Express to stop their fees on staff tips.
Possibly the target of most criticism, French restaurant chain Côte was revealed by former staff to take the full 12.5% service charge without distributing any among staff. This has been denied by the company.
Going one step further chain restaurants Las Iguanas and Turtle Bay have been reported to require that staff pay back 3.5% of the money taken from the tables they serve each shift. This rises to 5.5% for restaurants in London. So if a waiter sells £1,000 of food or drink during their shift they will be required to pay back £30 to their employer.
The revelations have cause consumers to announce boycotts of some of the restaurants and moved UK business secretary Sajid Javid to interfere, telling journalists: “I’m getting increasingly concerned about the practice of some restaurants, and will be taking a serious look into the issues raised.”
This is not the first time restaurant workers’ tips are in the news. A couple of years ago the Restaurant Group, owners of restaurants including Chiquito and Garfunkel’s, dropped a 10% admin fee. Since the scandal broke in the UK news this time around, the Giraffe chain, which is owned by supermarket Tesco, has dropped its policy to take 10% of credit card service charges.
But not all restaurants have been caught up in this. In fact, plenty let staff have 100% of tips and service charges, among them Pizza Hut, Carluccio’s, Jamie’s and Yo! Sushi. Wahaca, the Mexican street food restaurant, and its sister restaurant DF Mexico go one step further. Both operate a policy dictating that all tips go directly to staff. It means that the majority is retained by waiting staff and a smaller part is shared across teams as some may not be customer facing.
At DF Mexico all customers pay up front when ordering so tips are not as plentiful. The restaurant owner instead has decided to double all tips – if a customer leaves a £1 tip DF Mexico makes it £2, which will then be shared across all staff.
If wage levels remain relatively low this is a debate that is likely to keep re-appearing unless restaurants make changes to their tipping policies.