EVEN AS eateries and the UT Administration have locked horns over legality of service charge, waiters are clear: they prefer tips to service charge. Reason: restaurants levying service charge claim to distribute money collected from customers every month equally among the entire staff, including back-end workers, but employees are never sure if they are getting the right share, whereas a tip comes directly to the waiter. A waiter working at an Elante Mall outlet says, “Waiters prefer traditional way of tipping as they can keep the money received from customer for their services.” Another waiter working at a leading restaurant in Sector 26 says that the waiters at restaurants levying service charge tend to lose their motivation to be courteous to customers. Harbhajan Singh Ghambir, general secretary of the Chandigarh Hotel Workers Union, says, “At restaurants levying service charge, the staff knows that the customers will have to pay service charge, irrespective of service given to them, which is not the case in restaurants not imposing service charge. Waiters have to perform to get a tip.” The majority of the staff in most of the hotels and restaurants are paid low wages. As per the labour wages fixed by the deputy commissioner, the minimum monthly wage for a waiter is around Rs 9,000. Critics of service charge say it is a gambit by restaurant owners to find ways of compensating their staff without having to dig into their own pockets. Ghambir says that the waiters should be allowed to keep the tip collected by them and the eatery owners should compensate other staff from their own pocket. He accuses the eateries of not passing the entire amount collected from service charge to the staff members. At present, several restaurants in the city are levying service charge on consumers ranging from 6% to 12% of the total bill. By imposing service charge, the eating joints are adding an extra burden on customers who are already paying 25% levies — luxury tax of 7.42%, service tax of 4.8% and value-added tax at the rate of 12.5%. Explaining the rationale for levying service charge, Ankit Gupta, president of the Chandigarh Hospitality Association, says that although levying of service charge is not a very popular move, some restaurants do it for their staff’s benefit. “The aim behind the move is to give equal importance to all the staff members and not to make money,” he adds. The administration is in the process of framing a regulation to declare service charge illegal. A draft of the notification has been prepared which is pending with the legal remembrancer. Ashok Bansal, general secretary of the Chandigarh Hotel Association, who is not in favour of service charge, says that service charge only puts additional burden on consumers. “It should be a discretion of customers whether to tip a waiter or not, depending on the service provided,” says Bansal.
