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@Scott – I’m totally lost for words that you refer to hospitality (and other lower paid) jobs as “crappy”. It feels really offensive to people working hard to earn a living. Many don’t have much choice. Hospitality is a vital sector that employs about three million people in the UK.
Tips often make up an important part of total wages for many hospitality workers and their work should be respected as much as anyone else’s.
The fact that some types of role are not traditionally tipped or permitted to be tipped isn’t really a valid excuse for not tipping those in roles or sectors where it’s the norm.
Get a grip of yourself, of course there are crap jobs out there. You think people had childhood dreams of cleaning toilets?
Re your comment about traditionally tipped jobs, the key word here is ‘traditionally’. They now are paid at least a minimum wage putting them on par with many other crappy jobs. In the past a factory worker would be on a higher hourly rate than a hotel cleaner, so tips would be a boon to the cleaner.
And to echo other comments above, I actually have no qualms about tipping for good service, but that’s not what this thread is about. We’re talking about establishments twisting your arm to pay a fixed percentage on top of the total bill. They should roll it into their nightly rates if they want to pay their staff more.
@Scott – I’m sorry that I can’t kowtow and echo your comments. People may not have dreamed of doing rather unpleasant jobs but that doesn’t mean that the person or their role should be disrespected with unpleasant terminology.
As for getting a grip, I think I was taught this at about age seven before being packed off to prep school and I greatly respect my parents for teaching me not to be snotty towards or about people in lower paid jobs. Many simply don’t have options.
I don’t see an optional service charge as being “twisting your arm” but rather a nudge.
As for it being better for hotels to add something akin to the cost of a small service charge, that seems not only to go against what you are saying, but also hopelessly unrealistic given the apparent unwillingness of so many to pay higher room rates and the horribly competitive environment in which London hotels operate.
In respect of traditionally tipped or not tipped sectors and these hotel service charges, it is extraordinarily difficult in the current environment to find any staff, let alone good hospitality staff (that’s a worldwide, not just UK issue) so hotels in London and around the country are already paying well above minimum wage even for eg chamber maids and the potential to earn tips on top of wages is a very valuable recruitment and retention tool. Any guest who appreciates good service really ought to be on board with these charges.
If the hotel feels they can’t charge enough in the market to pay their workers a fair wage then they have to make decisions in their business accordingly. The market rate is what the market will bear. Hotels must cut their cloth accordingly and charge rates upfront accordingly so the customer can make his own decision.
Twisting of arms, whining to customers and basically blackmailing customers and trying to shame or ambush them with extra service charges they claim are so the hotel can pay what should be its own wage bill, is just not on and should be rebuffed. As mentioned I have been on both sides of this one and pretty sure at least @lumma has, too.
It’s a step forward if we can admit some people have cr4p jobs and that’s just life. Mentioning it shouldn’t attract accusations of demeaning anyone who does these jobs. That’s just the same sort of blackmail these hotels are trying to use to add a service charge instead of rightly considering *all* staff costs as just a part of their business.
The US legislation is a step forward becauses it reduces the ambush factor so it’s a start.
@Lady-London – the surprising use by you and others of this horribly pejorative term for jobs carried out by a significant part of the employed population is part of the problem. In many European countries such jobs are more highly rated and appreciated, correspondingly better paid and less precarious. The over excitable language in “twisting of arms, whining to customers and basically blackmailing customers” is somewhere between meanness, inflammatory and nonsense.
Saying that a job is crappy is not disrespecting the people who do that job. Those people would often be the first to agree that the job is crappy.
When a hotel is charging £600 a night for a small room, they should be able to afford to pay their staff properly.
If they need to charge £630 in order to pay their staff properly, then charge £630.
Saying that a job is crappy is not disrespecting the people who do that job. Those people would often be the first to agree that the job is crappy.
When a hotel is charging £600 a night for a small room, they should be able to afford to pay their staff properly.
If they need to charge £630 in order to pay their staff properly, then charge £630.
This is the general refuge of those too mean or too unwilling to pay tips. You should look at the cost analysis for a hotel and then come back! The suggestion that by seeking a service charge, a hospitality business is asking guests to make up for not paying staff properly is ludicrous. Presumably you don’t expect anyone to get bonuses in any role if the base pay is high.
In your example of adding £30 to a £600 bill, have you considered the competition element but more importantly how inefficient that is for the employer and employee vs receiving tips.
I’m not sure the ICPL would take kindly to its clientele being described as pretty rough, lol.
Henceforth, the ICPR!!
That’s how I’m always going to think of it now 😂
It seems to me this could be made far simpler by the hotel declaring at the point of booking and then again at check in that an x% discretionary service charge will be added to the bill. This is what restaurants do when stating their service charge at the foot of the menu.
When hotels choose not to disclose their charging structure at the point of booking and add additional charges later (discretionary or not) it just leaves a bad taste. I don’t have a problem with them being there just tell me what they are beforehand.
Yet another thread which could and should be sharing useful information completely ruined by one individual who cannot seem to accept that when the majority of others have a different opinion there is normally a reason for that, and who insists on always having the last word even when it adds no further value as nothing new is being contributed.
In your example of adding £30 to a £600 bill, have you considered the competition element but more importantly how inefficient that is for the employer and employee vs receiving tips.
Ahhhh … what @JDB means is we should be paying cash to waiters, concierges, maids, etc. That way the hotel charge £600 plus 10% “fee” and we can contribute to the “real” economy giving handshakes with a £5 note rolled in our hand.
I have always wanted to do that thing where you put a $20 bill on the shirt pocket of the waiter and say “Keep the change” while you tap him in the chest gently and wink at him. This must be from all those classic films where Americans do that to the (usually much darker colored) friendly hotel porter.
This sounds as such a good way to reward good service. better than the business paying a fair salary or advertising the correct price online whiteout hidden charges. Plus it makes you feel so macho!
@yonasl – no, what I meant is that an employee receives more from a £1 service charge than they do from a £1 increase in pay because the former isn’t subject to some of the statutory deductions and it costs the employer less. Cash tips are a different issue but rarely reach the pockets of the ‘hidden’ employees that still meaningfully contribute to your stay. The market for hotel employees in London is very competitive so if an employer doesn’t pay the “fair salary” to which you refer, they won’t have any employees.
The issue of paying special cash tips to receive favourable treatment is an entirely separate issue. A family member recently paid a fairly large cash sum to the head waiter to reserve a particular table in the restaurant of a very small but famous hotel at which he was staying. On coming downstairs for dinner, that table was already occupied; he had been outbid, but of course you don’t get your tip back.
As a pre-teen I observed the cash price of having a front row table on the terrace at the Carlton in Cannes on a fireworks night cleared of people to make way for my family, paid by our host not any family member. For better or worse, that concept hasn’t changed some fifty years on.
This is the general refuge of those too mean or too unwilling to pay tips.
and
Presumably you don’t expect anyone to get bonuses in any role if the base pay is high.
I’m sorry to carry this forward but I cannot stand to see the personal insult of “being mean” being perpetrated on posters here who do not wish to be blackmailed or ambushed into paying additional service charges, or resort fees of no value to them.
That is someone’s own decision. Yeah there are people who for whatever reason tip less or not at all, and not all of them because they are mean. I don’t like some of those people. But that’s their choice. If the hotel wants more money they need to incorporate that in their displayed prices.
And “Presumably you don’t expect anyone to get bonuses if their base pay is high”. Having been privy to which positions get paid what compensation and how compensation is made up in many institutions and some industry, it’s quite common that highly paid management or professionals and some of those who are not highly paid, earn very, very considerably less than some ‘lower’ categories of staff or individuals in the same firm. On the other hand some very senior people do get both high pay and very high extra payments of various types as well. But not all. Many times in finance and industry I’ve seen people refuse promotion, or say they will, because they’ll lose serious money.
Take City dealers and salesmen, for example, whose compo can every year dwarf that of those senior to them. Or sales in other areas of industry. Some jobs are bonused or tipped and sone aren’t, whether the base pay is high or low.
@JDB service charges paid onwards to hotel staff aren’t subject to PAYE and NI? Or did I misunderstand you?
The Carlton Cannes terrace story (sodden with rain when I passed by it a week ago) reminds me of SushiSamba in the tall tower at the centre of the Palm Jumeirah. Views in all directions, including towards the beachfront royal palaces (!). Every table was occupied by the otherwise rarely seen local Emiratis; Westerners were seated one row in. Not sure if tips were the reason in that case but hilarious to see such shameless segregation.
Legislation states that any amount paid to an employee which is a payment ‘of a gratuity’ or is ‘in respect of a gratuity’, is exempt from National Insurance contributions if it meets either of the following 2 conditions:
1) it is not paid, directly or indirectly, to the employee by the employer and does not comprise or represent monies previously paid to the employer, for example, by customers
2) it is not allocated, directly or indirectly, to the employee by the employer
By ‘allocated’ we mean deciding who should receive what amount through tips. Whether either of the conditions apply will depend on the facts.In most cases where you pass tips to an employee, you are liable for both employer and employee National Insurance contributions because neither of the 2 conditions are satisfied.
And if an employer has managed to contrive a scheme whereby he tops up the meagre wages of his staff by way of a service charge that somehow escapes liability for tax and NICs, then JDB clearly believes that we should encourage this tax evasion and low pay culture. No thanks.
Tips don’t attract VAT. I assume that’s what @JDB meant when he referred to statutory deductions. A tip is worth 20% more to each individual employee than an equivalent involuntary service charge.
I’m not sure that it’s fair to call that tax evasion. If the government wanted to collect VAT on tips and service charges, it could easily do so. @Alex-G – do you refuse to buy cold takeaway food because the government doesn’t collect VAT on it? If not, are you also guilty of that tax evasion?
I hate tipping culture, and I wish the government would take steps to outlaw it. I would much prefer staff to be properly remunerated and not have to rely on the kindness of strangers. But we are where we are, and I am much more fortunate than the people who provide me with service in hotels, restaurants, taxis and barbers. So I always tip generously and without resentment, and I hope that, despite a deeply flawed system, I can make the world a slightly better, kinder, happier and fairer place through my own personal actions.
@Alex-G only one of the two conditions you cited needs to be satisfied and condition 2 is commonly met by having a group of staff determine the allocation of tips rather than the employer. This is explicitly allowed in HMRC guidance.
@Alex-G only one of the two conditions you cited needs to be satisfied and condition 2 is commonly met by having a group of staff determine the allocation of tips rather than the employer. This is explicitly allowed in HMRC guidance.
So it is a tax avoidance scheme.
Not something that I want to support, thank you.
NICs are a tax. Employers NICs are 15%. The marginal rate of employees’ NICs is 8%, or 2% above the upper earnings limit.
I would much prefer staff to be properly remunerated and not have to rely on the kindness of strangers. But we are where we are, and I am much more fortunate than the people who provide me with service in hotels, restaurants, taxis and barbers.
We have minimum wage in this country.
I understand this exists in some other countries and also exists in some states within the USA.No idea why mandatory tipping is still encouraged.
Loathe the tipping culture that’s creeping in everywhere. Was at local girlie beauty salon a few days ago and on paying, the screen displayed 15% 10% 5 % with the amount it equated to,or other . The skip icon was a different contrasting fainter colour that had to be pointed out to me. The girl was just doing the job I was paying her for.There as nothing that merited a tip due to above and beyond expected service.
JDB has already told you why tipping is encouraged it’s because it doesn’t attract VAT which means the “fair price” you think you want would then be 12% higher rather than 10% higher
Id rather not pay an extra 2% thank you very much.
All menus tell you there’s a service charge if you don’t like go elsewhere.
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