No, I don’t support this but still:
An upmarket steakhouse at an exclusive London hotel is being accused of topping up managers’ salaries by handing them tips intended for waiters.
Trade union Unite claims four senior managers at STK London in the ME London Hotel on the Strand had their pay boosted to around £50,000 a year.
It has calculated that nearly two thirds of the 15% service charge added to every bill was handed to managers rather than serving or kitchen staff. The union says the company also siphons off 6% of the service charge paid by customers as an “admin fee”.
Unite national officer Rhys McCarthy said: “Restaurants and bars were banned from using tips to top up staff wages to the legal national minimum back in 2009, but that clearly hasn’t stopped STK from finding a nifty loophole to subsidise managers’ wages above and beyond the national minimum wage.
“It is the ultimate kick in the teeth for customers and staff alike, if restaurants are allowed to dip into tips and the service charge without a shred of transparency of how the money is being used or who is benefiting from it. If managers are not prepared to reveal what portion of the service charge and tips they are pocketing, then they should leave them alone.”
The definitions here: tips belong to the staff, they’re legally their money.
The service charge belongs to the business, it’s legally the company’s money.
Yes, yes, yes, maybe it shouldn’t be this way but it is. That’s why tips do not pay VAT nor NI and a service charge pays VAT and the distribution of it pays both NIs.
Necessary to get this stuff right while complaining about it.