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Service charge: Staff at many restaurants say they will ask for a raise, fear tips could go down

With hotels and restaurants banned from charging service fees, waiters, chefs and other workers fear losing money and plan to contact management to ask for a pay rise. They also fear that tips given by customers out of goodwill will decrease.

Prakash Singh Koranga, 27, from Uttarakhand, a chef who works at a popular Moti Mahal Deluxe franchise restaurant in South Delhi, said the service charge which is split proportionally among the staff acts as a ‘ ‘extra income’ and ‘an incentive to give our best at work’.

”I’ve been in this industry for about five years now. As chef, I will continue to cook the best meals I can for the guests, but the decision has affected our morale, as now we would have to make do with our salary alone. Is it possible to survive in this period of inflation with just a salary of Rs 14,000? We will have to follow the new standards, so I will ask my employer for a raise to compensate,” he told PTI.

Fellow food and dining chef Naveen Pandey, who worked for the famed chain for 18 years, echoed her sentiments.

“I might even move to another place (restaurant) with better prospects if they don’t raise my salary,” said Delhi-born Pandey.

Amid mounting consumer complaints, the Central Consumer Protection Authority (CCPA) on Monday banned hotels and restaurants from levying service charges automatically or by default on food bills and allowed customers to file complaints if of violation.

The decision drew a mixed response from hoteliers, restaurateurs and associations across India, some of whom said the move will have ‘no impact’ on their businesses, while others fear that it would affect their income and cause the dissatisfaction of their staff, who used to receive their share of the service fee every month until now.

Chefs, servers, and kitchen staff form the backbone of the catering business with a few office workers or a manager directing day-to-day operations. Staff at several large and small restaurants, cafes and hotels that PTI spoke to from Delhi to Kolkata and from Mumbai to Chennai said they would have to accept the new standards willy-nilly, but many were adamant that that they would not pay with their existing salary.

In Kolkata, top restaurant brands include Mocambo, Peter Cat and the nearly century-old Aminia.

A waiter, employed at an Aminia outlet in the New Market area, on condition of anonymity, said: ‘I receive an average of Rs 1,000-1,500 from customers every day (in tips). We never ask but many places for an extra 50-100 rupees with the bill and wave at us not to return it. I don’t know if tipping will be prohibited in the name of scrapping service tax.” There is no service tax calculated when billing Aminia. But can customer tips be stopped? Will it now be called illegal, he asked.

Suvendu Porel, server at Peter Cat, also said that many customers personally tip, happy with the service and the food, and do so as they wish.

In Connaught Place, in the center of Delhi, there are several great restaurants and chic cafes. In South Delhi, a staff member at Green Sky Cafe, which serves Korean food with BTS boy band music playing in the background, said: “We don’t charge service tax, so the decision won’t affect us.” The dishes. I have worked in this restaurant for 25 years. My salary is much lower to feed a family of five in a city like Delhi. We used to get a bit of a break from the service charge. I used to get my share of 1,800-2,000 rupees per month in service charges. The money helped me pay for small expenses like bus passes. It will strike our lives. What is our fault?” asked Rajesh, 49, a restaurant employee in Connaught Place.

Many hoteliers, restaurateurs and associations, across India, have also highlighted the terrible impact that the COVID-19 pandemic has had on the hotel and catering sectors and raised their concerns about the impact that this decision would have on the company.

In Mumbai, Pradeep Shetty, Manager of Maharaja Restaurant and Senior Vice President of Hotel and Restaurant Association of West India (HRAWI), said: “The restaurant industry is slowly recovering from the disruption caused by the pandemic, during which many workers left and were taken on to other jobs. It is very difficult to retain and hire employees in this company and at a time when we were trying to recruit the people who had left the industry, this service fee decision has made it much less attractive for people to come back.” Covid had hit this industry ‘very hard’ and this service fee decision ‘will continue to make it difficult in the future.”Now as owners it has become very difficult for us and we have to work on it and see how we can compensate our workers,” he added.

Sherry Bhatia, President of HRAWI and General Manager of the Golden Swan Hotel, said no one was forced to pay the service charge and no consumer returned if they refused to pay it.

“The industry expected the enactment of a comprehensive law that would curb the collection of charges beyond the cost of a product or service and would be applicable to all industries.” he added.

Mr Ravi, a senior member of the Tamil Nadu Hotel Association, said hotels in Chennai and Tamil Nadu do not charge any service fees.

”Some hotels charged it because if cutlery was accidentally damaged or broken while consuming food… that cost was recouped. Some money also goes to work, but it is shared across departments among employees,” he told PTI.

Removing service charges would impose additional expenses on hoteliers, he said.

The Kerala Hotel and Restaurants Association (KHRA) said that service charges are not levied on customers by its members.

“Moreover, it is a reward given by a customer if he is satisfied with the service or the quality of the food, and therefore, it is the customer’s choice,” said the chairman of the state committee. of the KHRA, G Jayapal.

“As a result, the directive from the Central Consumer Protection Authority (CCPA) will not affect us,” he added.

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)