Mixed response for service reward plea
Paula Bennett’s call for New Zealanders to tip waiters and waitresses who give ‘excellent service’ has received a mixed response from experts.
Some said the Deputy Prime Minister’s suggestion would lower hospitality workers’ wages, while others argued it could increase the government tax take.
E Tu Union industry coordinator Jill Ovens said, if encouraged, tips would act as an extra tax on diners and would not necessarily recognise good service if people felt obligated to tip.
Deloitte tax partner Mark Lash said officially if a worker received a tip, they had to contact Inland Revenue to disclose it and pay tax on the amount.
If workers did not do that, as was highly likely, more tips could boost under the table income that was not taxed.
He said the Government would see some of the tip - via tax - if workers owned up but argued it was not an extra tax cost for the customer if they did not.
It is similar to paying a holiday surcharge, Lash said.
Ovens also voiced concern that chefs and kitchen staff did not see enough of the tips given to restaurant wait staff.
New Zealand’s mostly cashless society meant tips were now paid on eftpos machines and not put in the democratic tip jar, she said.
‘‘It probably ends up in the pocket of the employer.’’
Bennett, who made her call earlier this week, said Kiwi service was already good, but she believed it was better in countries with a strong culture of tipping, such as the United States.
‘‘If you receive excellent service, and you can, you should tip,’’ Bennett said.
‘‘I don’t think that tipping should be mandatory in New Zealand, but I do think that we shouldn’t tell people not to tip when they come here, which we did for a while.
‘‘People will enjoy their work more and get paid more - it’s a plus plus.’’
Bennett, who worked as a waitress in the 1980s, said: ‘‘I don’t want us to turn into mandatory tipping for people just to survive, but I do think if we reward good service it’s going to make everyone smile a bit more.’’
Hospitality New Zealand advocacy and policy manager Dylan Firth said restaurants could decide for themselves whether they let individual staff keep tips they received or made them share tips with all staff.
While he hoped restaurant owners and staff were not pocketing tips for themselves, he said cash tips did pose that risk.
Firth said Bennett’s tipping suggestion would not lead to lower wages.
‘‘It is not fair to say this is a way to keep wages down … That is a misrepresentation of the industry.’’
He said more tipping would lift job satisfaction and reduce the high turnover of staff in the hospitality industry.
But Ovens said an increase in wages would do that, not more tips.
She said tips would not necessarily cause ‘‘rock bottom’’ hospitality wages to lower, but would discourage them from increasing.
Statistics New Zealand’s New Zealand Income Survey: June 2015 Quarter said the median hourly wage for the retail trade and accommodation industry had increased 3.9 per cent to $16.63 in one year.
New Zealand’s adult minimum wage is $15.75.
Firth said the increase in wages from 2014 to 2015 showed industry employers were committed to paying staff more.
‘‘The United States system is not one we are after.’’