The hefty tips you pay as service charge at restaurants may not be reaching the intended recipients — the waiters and other staff.
Eateries in Delhi started adding the service charge to the bill about eight years back. This charge — usually between 5-10% of your bill — is in lieu of the tip and has to be distributed among waiters and other staff every month. But that doesn’t always happen.
Many restaurant workers say part of that money is pocketed by the management. “Why should the managers take a cut when we are doing all the work? They have higher salaries already. Because of this service charge, people don’t tip us anymore,” says a waiter at a Khan Market restaurant.
Managers say some of that money goes into maintenance, breakage and other miscellaneous costs. “Only 50% of the money collected is given to us at the end of the month,” says a waiter at a small restaurant in Green Park. Of the 12 restaurants HT visited, five did not pay the entire service charge to their staff.
Customers — many of whom do not know the difference between service charge and service tax (levied by the government) — feel equally cheated.
“Eating out has become a pain because of the miscellaneous charges. Restaurants make a profit, the government gets its due, and we end up with empty wallets,” says Arush Bhandari, 22, a law student from Amity University.
Consumer rights columnist Pushpa Girimaji summarises the problem: “It’s an uncalled-for charge at a time when costs are rising. Traditionally, tips were voluntary, but this makes them mandatory, which is unfair. Plus, there is no guarantee that it is being given to the staff.”
Since service charge at each restaurant varies, and usually depends on the whims of the manager, some restaurants accept if a customer refuses to pay it. “We were forced to add it three years back to retain our staff, since all other restaurants had started applying it,” says Manpreet Singh, owner of Tao and Zen in Connaught Place. “But if a customer does not wish to pay the charge, we accept that.”
If a restaurant insists on the service charge, customers have the option of lodging a complaint on the National Consumer Helpline, though calls and messages sent by us were met with no response.
“There is no law to regulate service charge and therefore no uniformity. If the management is not paying it to the waiters, it is malpractice and the government should look into it,” says HK Awasthi, legal head at Consumer VOICE, a voluntary organisation and online magazine on consumer education.
Officials, however, maintain all is well. “We haven’t received any such complaints. But, if the problem exists, there is definitely a need for lawful methodology to look into it. If we find out that this is happening, we will take action,” says Ramesh Tiwari, labour commissioner of Delhi. An official from the consumer affairs ministry said it is a matter to be decided between restaurant employers and employees.