Top Chain Restaurants Taking Money From Staff Gratuities – Can My Employer Keep My Tips?

Top Chain Restaurants Taking Money From Staff Gratuities – Can My Employer Keep My Tips?

Over the next few weeks, employment union Unite is planning a series of demonstrations outside a number of Pizza Express restaurants. This is in response to the company’s policy taking 8 per cent of staff tips when customers tip by credit card.

Pizza Exprss Tip

Unite is acting on behalf of members who brought the issue of ‘tronc ‘ fees. This is where a restaurant takes a skim of tips paid by card in order to ‘process’ them.

It’s not just Pizza Express that partakes in this practice, many chains including Garfunkel’s, Chiquito, and T.G.I. Friday have taken tronc charges in the past, but they have subsequently been dropped according to Unite. Unite hope that the demonstrations will encourage Pizza Express to do the same. They said: "We are calling on Pizza Express and others to abolish the unfair and unjust percentage deduction. Until this happens tip in cash!"

However, a spokesman from Pizza Express defended the practice saying that they were not the only business taking tronc charges and that they do not take National Insurance from such tips, which would amount to 12.8 percent.

Can my employer keep my tips of services charges?

Tips are monies that may be paid by the customer either in cash or by adding an extra amount to a credit card payment. Where tips are made in cash and given to an individual server, these are deemed to be a voluntary gift to the staff member by the customer. However, where tips are pooled, it is possible for your employer to keep some of the money back, say for example to account for money missing from the till. This practice is entirely legal as tips are not classed as wages and thus in legal terms this will not be an unlawful deduction from wages.

Tips paid voluntarily by customers that are added to a credit card payment or even to a cheque become the property of your employer when they are paid. In fact, your employer is entitled to keep this money in its entirety but may choose to distribute it amongst staff.  However, where tips are paid to staff, they should be in addition to wages – not as a replacement.

What about a compulsory service charge?

Where a service charge is compulsory, for example in many restaurants when you dine as a large party and a percentage is added for service, this money belongs to your employer and they can choose to distribute this as they wish.

On the other hand, your employment contract may state that you are entitled to a certain percentage of any service charge. If this is the case and this is stated in your employment contract, you must be paid your share of this, or your employer is breaching the contract. This also means your employer cannot change the way that service charge is shared unless you agree. Again, any service charge owed to you should be paid in addition to your wages.

For more on employment law check out our series of legal guides.

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