Restaurant Staff Express Displeasure Over Service Charge Rule, Say Will Seek Pay Hikes

Restaurant workers have expressed displeasure over the move to bar levy of service charge, with many saying they will seek a salary hike to offset the loss. Others are worried that even tips "may now dwindle".

Uttarakhand's Prakash Singh Koranga (27), a chef who works at an outlet of Moti Mahal Deluxe restaurant in South Delhi, said service charge -- which gets proportionally divided among the staff -- acts as an "extra income" and "incentive to give our best at job".

"I've been in this industry for about five years now. As a chef, I will continue to cook the best meals I can for guests, but the decision has affected our morale, as now we would have to be content with salary only," Singh said. "Is it possible to survive in this time of inflation with a salary of Rs 14,000? We will have to follow the new norms, so I will ask for a pay raise from my employer to compensate."

His colleagues in the kitchen and outlet manager Naveen Pandey, who has worked for 18 years for the famous chain, echoed his sentiments. "I may even switch to another place (restaurant) with better prospect, if they do not hike my salary," Pandey, who is a native of Delhi, said.

Amid rising consumer complaints, the Central Consumer Protection Authority on Monday barred hotels and restaurants from levying service charge automatically or by default in food bills and allowed customers to file complaints in case of violation.

The decision has drawn mixed response from hoteliers, restaurant owners and associations across India, some of whom said that the move will "not impact" their businesses while others said it may have a bearing on their revenue and cause dissatisfaction among their staff.

Chefs, waiters and kitchen staff constitute the backbone of a restaurant business with a few desk staff or a manager handling daily operations. Staffs of several big and small restaurants, cafes and hotels that PTI spoke with said that they would have to accept the new norms willy-nilly, but many were categorical that they won't settle for their existing salary.

Many hoteliers, restaurant owners and associations across India, also pointed at the terrible impact the pandemic has had on the hospitality sector, and raised concerns over impact that this move would have on business.

Kolkata

A waiter, employed at an Aminia outlet in the New Market area, said, "I am getting Rs 1,000-1,500 on an average from customers every day (in tips). We never ask but there are many who place an extra Rs 50-100 note with the bill and gesture us not to give it back. Don't know if tipping will be prohibited in the name of scrapping service tax."

There is no service tax calculated during billing in Aminia. But can tipping by patrons be stopped? Will it be now termed illegal, he asked.

Suvendu Porel, a waiter at Peter Cat, also said many patrons personally give tips, satisfied with the service and food, and they do it as per their wish.

New Delhi

'We don't charge service tax, so the decision won't impact us," said a staffer at Korean restaurant Green Sky Cafe, on the condition of anonymity.

But Rajesh, who washes utensils, at a Connaught Place restaurant, is dissatisfied.

"I have been working in this restaurant for the last 25 years. My salary is very less to feed a family of five in a city like Delhi," he said. "We used to get a little respite from the service charge. I used to get my share of Rs 1,800-2,000 per month as service charge. The money helped me to pay for small expenses like bus pass. This will hit our lives. What is our fault."

Mumbai

"The restaurant industry was slowly recovering after the disruptions caused by the pandemic, during which many workers had left and were engaged in other jobs," Pradeep Shetty, director of Maharaja Restaurant and senior vice president of Hotel and Restaurant Association of Western India, said.

"It is very difficult to retain and to hire employees in this business and at a time when we were trying to get the people who had left the industry this decision on service charge has made it far less attractive for people to join back."

Covid-19 had hit this industry "very badly" and this decision on service charge "will continue to make it difficult" going forward. "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 said.

HRAWI President and Hotel Golden Swan's Managing Director Sherry Bhatia said nobody was forced to pay the service charge nor was any consumer turned back if they disagreed to pay it.

"The industry was expecting the enactment of a comprehensive law that would put curbs on levying charges over and above the cost of a product or service and which would be applicable across all industries," he said.

Chennai

M Ravi, a senior member of Tamil Nadu Hotel Association, said hotels across Chennai and Tamil Nadu were not levying any service charge.

"Some hotels were charging it because if accidentally a cutlery gets damaged or broken while consuming food...that cost is recovered from this. Some amount also goes to the labour but it is shared across departments among the employees," he told PTI.

Removing service charge would impose additional expenditure on hoteliers, he said.

Kerala

The Kerala Hotel and Restaurants Association said that service charge is not levied upon customers by its members.

"Moreover, it is a reward given by a customer if he or she is happy with the service or food quality, and therefore, it is customer's choice," KHRA State Committee President G Jayapal said. "As a result, the Central Consumer Protection Authority direction will not affect us."