The Guardian view on tipping: the impulse to give meets the impulse to grab
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Version 0 of 1. If you are out for a meal this weekend, tipping will seem like a straightforward part of paying the bill. But if you’re serving that meal in the wrong restaurant, there will be nothing straightforward about getting all the tips that you’ve earned. After an impressive campaign by waiters and the Unite union, Pizza Express announced this week that it would desist from cutting an 8% sliver out of gratuities, but many other restaurants, including other big chains, continue to diddle staff and customers alike through so-called admin fees. An impulse to give on the part of the British consumer provokes an equal and opposite impulse to grab from the British employer. Traditionally, extra cash that was plonked in front of an employee was, by legal convention as well as common sense, always theirs – just as it was intended to be. But when payment went plastic, clever lawyers popped up and successfully argued that since gratuities added to cards were paid in the name of – and in the first instance to – the house, they were the property of the house, too. For a time, tips expropriated this way were even counted towards the minimum wage, diluting that duty of the employer. Gordon Brown’s government closed down that particular loophole, but other fiddles continue. Only last month, the Observer revealed how two eateries, Las Iguanas and Turtle Bay, were demanding that waiters cough up a proportion of the notional tips expected to be paid on all the meals that they served, as a contribution to staff “development” schemes. When the assumed tips aren’t paid, some waiters claim, the effective gratuity turns negative. Even when the tips are paid, this ridiculous levy on the total bill that is due to the restaurant itself represents a sort of reverse piece rate. So, what’s to be done? Back in 2009, the catering industry agreed to a voluntary code under which restaurants were at least supposed to explain where tips went, for example on the menu. A review and refinements were meant to follow, but momentum was lost under the coalition, and the code is often ignored. Now that the business secretary, Sajid Javid, has taken an interest in tips, he should find transparency a useful first principle. The code should be reviewed, toughened, reissued – but with a clear threat of mandatory action if it doesn’t work. Transparency, however, is not enough. There also needs to be absolute clarity on what is a wage, what is a tip, and who owns what. Some progress was made here in the courts, after the taxman got wind of how employers were at the same time fiddling around with the distribution of tips as freely as if they were wages, while also maintaining that they were not wages at all when it came to tax. In the end, it was agreed that national insurance need not be paid so long as all tips were placed in a “tronc” for the staff as a whole. This is a tax break that can and should be made conditional on the tronc being the staff’s alone. New tax rules should specify that there should be no company charges, and no directions from head office about how the cash should be split. If it is the staff’s money, it is for them to divvy up among themselves. It is simple stuff, which Mr Javid should want to put right urgently. What better way to make good on that Conservative slogan about being the party of hard-working people? |