Restaurant chains that take 10% off staff ’s tips

BRITAIN’S biggest restaurant chains are routinely keeping a share of tips left by customers for waiting staff, it has emerged.

Low-paid waiters and waitresses lose up to 10 per cent of the service charge paid by diners using debit or credit cards.

The restaurants say the money is used to cover administration fees.

Pizza Express, Ask Italian, Zizzi, Prezzo and Tesco-owned Giraffe, have been accused of the practice.

Belgo, Bella Italia, Café Rouge, Strada, Las Iguanas and Spaghetti House also reportedly subtract administration fees from tips.

Many of the chains claim they do not use these tips to boost profits.

Instead, they say the money covers the cost of placing the tips into a central electronic fund, known as a tronc, where they can then be fairly distributed between staff.

But unions say that many rival chains hand over 100 per cent of tips paid by card to staff, including Wagamama, Carluccio’s, Chiquito, Frankie & Benny’s and Garfunkel’s.

They also claim the administrative costs of running such a system are minimal. Dave Turnbull, of union Unite said: ‘Claiming it goes t owards administration seems like a red herring because managing a tronc involves human r esources managers who are already employed.’

Mr Turnbull said the pooled tips system mostly benefited bosses, who could avoid paying national insurance contributions on tips from credit and debit cards.

He added: ‘ The so- called costs associated with it are covered by the national insurance tax break employers receive.’ Casual Dining Group, which owns Café Rouge, Belgo and Bella Italia, pocketed £33million in profit last year, yet charges a 10 per cent fee on all tips paid by card. Zizzi and Ask Italian, owned by private equity f i rm Bridgepoint, charges an 8 per cent fee, as does Pizza Express.

However, Restaurant Group, which runs Frankie & Benny’s, Garfunkel’s and Chiquito, does not skim any money from staff ’s tips.

The firm’s Danny Breithaupt told The Independent: ‘Charging staff to process tips does not fit in with our culture and we feel it would be deeply unfair … They are the ones that earned the money … and I’m certain our customers would want to know the full tip amount is being paid to their waiter or waitress.’

He said that since his company axed the fee eight years ago, staff retention had improved, saving the firm money.

Unite plans to demonstrate outside Pizza Express after it was presented with a letter from a staff member complaining they lose £3 a night in tips because of the fee.

The employee said they earn minimum wage despite working there for 15 years and are ‘heavily reliant’ on tips. They added: ‘ Customers often ask whether their tip goes to the staff. When I tell them about the 8 per cent administration fee, they’re genuinely shocked, and will tip in cash instead.’

Pizza Express said: ‘Our restaurant teams are charged an administrative fee of just 8 per cent, compared t o national i nsurance contributions of 12.8 per cent, which they would otherwise be required to pay.’

Bridgepoint said its 8 per cent fee covers costs including credit card transaction charges.