A French restaurant chain with 72 branches in the UK has come under fire for keeping the service charge it adds to customers’ bills rather than letting waiting staff take it home as tips.
The Côte chain has been accused of retaining the 12.5 per cent charge that is automatically added to bills and using it to top up minimum wage-level salaries instead of handing it directly to the staff who provided the service.
The restaurant has defended the practice, saying that it allows them to pay staff an hourly rate of between £7.50 and £8 an hour, above the minimum wage of £6.50 for those over 21.
An unnamed staff member told the Evening Standard newspaper: “We are told by management that we don’t get to keep the service charge because we get paid more than the minimum wage, so we should be grateful, but most of us would prefer earning the minimum wage and taking home our tips.”
Sajid Javid, the business secretary, said he did not believe the system was fair and revealed that the government would be examining the issue.
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“While it would not be appropriate to comment on this individual case, as far as I’m concerned, tips belong to the staff,” he said. “I’m getting increasingly concerned about the practice of some restaurants, and will be taking a serious look into the issues raised.”
Iain Wright, the Labour MP who is chairman of the business select committee, described the practice as “unacceptable” and said: “I think we have to expose some of the negative business practices that don’t help the staff. Legislation is a last resort, but this should certainly be looked at.”
The restaurant said the service charge was used to top up a base salary that is “at least equal to the national minimum wage”. A spokesman said: “The individual restaurant manager allocates the service charge across all restaurant-level employees as we believe it is important to recognise those preparing the food or cleaning the kitchen, in addition to front-of-house staff.
“It is paid through the payroll, net of taxes and NI. As such, the company does not recognise the service charge as revenues in its accounts.”
The staff member interviewed by the Evening Standard said that even cash tips left on top or instead of the billed service charge are taken by the restaurant manager: “One night I was waiting a large group and had to split the bill for each guest. At the end they left a £100 cash tip, but I was forced to hand it over to my manager.”
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Staff said that they had been instructed to tell customers that the service charge was given out to workers.
Côte responded: “Company policy is that where customers leave a cash tip it is at the waiter’s discretion to keep it for themselves or to include it in a general pot with other members of staff. Any deviation from this will be investigated.”
Outside a branch of Côte yesterday, Michael Ramon, 21, a student from Bilbao, said: “It’s not fair for workers and is a problem if they are not getting money customers have given for them.” Sarah Wilcox, 41, said: “If they are paying a fair wage, that’s the main concern.”
Chains including Pizza Express have been criticised for charging an 8 per cent admin fee on all tips paid by debit or credit card. The Giraffe and Zizzi chains came under fire for the practice.