The British Hospitality Association (BHA) has called for the introduction of legislation that would make it compulsory for businesses to reveal how service charges and tips are distributed among staff.
At present, businesses are legally entitled to deduct administration costs from service charges, however the BHA has said it is important that “customers understand exactly how much is deducted and why”.
In a letter to business secretary Sajid Javid, the BHA proposed businesses disclose how they deal with discretionary charges and non-cash tips “by a written notice available for inspection at each restaurant and on the restaurant’s website, if there is one”.
The BHA said the disclosure should cover: “Whether an amount is deducted for handling costs (and how much); how the remainder is shared between the restaurant and the employees; and the broad process for distribution, for example, that they are shared between the employees in the restaurant through a system controlled by a representative of the employees.”
A government consultation on tips, cover and service charges is ongoing and is open for submissions until November 10.