The essence of discretion, or cash, as the service industry knows it, carries with it a long history of restaurant-goers expressing their gratitude for good service with an immediate, direct and universal cash tip. Nowadays, 'service charge' has different meanings depending on what payment form you choose.
With cash, the waiter has the choice to pocket it or stick it into the restaurant tip jar to be distributed equally amongst the kitchen and floor staff. With electronic transactions, it's a different story.
In the UK, Prime Minister Theresa May announced plans in October to restrict restaurants from keeping portions of the service charge discretely included in bills paid with electronic payment methods across the country. The announcement comes three years after a consultation which concluded that respondents are overwhelmingly in favor of waiters keeping tips.
Cash tips are legally the property of staff. They can go straight to the person serving you or they can be pooled and shared out among staff - but they are not the property of the business.
Card tips are different - they currently belong to the owner of the restaurant who has no legal duty to hand any of them over to staff (although in practice many do).
The same applies to any service charge automatically added to a bill. How businesses decide to share these tips out varies widely. Some keep all the tips while some skim a percentage off the top. Others take a percentage to distribute to the back of house staff.
In the US, President Trump proposed a radical move in February this year to allow restaurants to pocket tips sparking outrage across the American service industry.
How hard will workers be hit by this rule? Using publicly available IRS, Bureau of Labor Statistics, and Census Bureau data, the Economic Policy Institute estimates that workers are likely to lose about $5.8bn in tips each year under the rule. That amounts to roughly $1,000 on average for each tipped worker, or between one and two weeks of earnings for many in the industry.
After eating at a restaurant, how do you usually tip the waiter for good service?
Metro Restaurant brands don’t give 100% of your tip to your waiter or waitress
Many big chains deduct a percentage of service charges to pay for ‘admin costs’. The big restaurant chains that do this – according to the Unite Union include Pizza Express, Giraffe, Cafe Rouge and dozens of independently run food establishments. Pizza Express keeps 8 percent of any tip made with a credit card for ‘admin fees’ while Giraffe and Cafe Rouge keep 10 percent.
Guardian How much of your tip goes to staff? A restaurant by restaurant guide
From Angus Steak Houses to Jamie’s Italians, we break down how each major restaurant chain distributes its tips. Angus Steak Houses Deducts an undisclosed fee from tips left on credit cards. A spokesperson said: At Angus Steakhouse, our staff keep 100% of their own tips less a small processing fee for credit card charges...
Guardian Restaurants have no right to take employees' tips
When most people leave a tip at a restaurant, they assume it will go to the person who served them their meal. For decades, that assumption was correct. But the Trump administration wants to change that. Going against longstanding practice codified in a 2011 rule, the labor department, led by Trump appointee Alexander Acosta, has proposed a radical change that will allow restaurant owners to pocket the tips customers leave for the wait staff.
Mirror Restaurants will be BANNED from hoarding staff tips under new law
Restaurants will be forced to hand over all tips to their staff, Theresa May will announce today. New laws will stop high street chains like Prezzo, Strada and Zizzi making deductions from the money left for their staff by diners. It comes after public fury over the way some companies dealt with staff tips, with some keeping back cash.