Is it legal for a restaurant to keep all credit card tips?

[hopkin]

I work in a restaurant. When we give customers the bill at the end of their meal, we attach a slip asking them whether they would like to leave a tip and if so, how much. The slip states that "all gratuities are retained among the staff." That phrase is printed on the bill too. It is not true. All card tips are retained by the company and we never get any of them. Cash tips are distributed on a weekly basis, with each staff member receiving the amount that the 2 longest-serving waiters feel they deserve.

Can anyone fill me in on the legality of this system?

i'm in Scotland so not sure if it's different. Any tips added to a credit card can legally be kept by the business but anything left in cash must go to staff. If credit card tips are distributed to staff then they are liable to tax. Not right that it says on slip that goes to customer that staff keep tips however any restaurants I've worked in the owner keeps cc tips but many customers do ask and if I'm out I always leave a cash tip

Thats terrible, I'll make sure I leave tips in cash in future. In effect that means that as customers we are paying more for our food. It sounds misleading to me.

I didn't know this and have always left a credit card tip. Cash in future.

I don't particularly like the sharing out of tips either. I tip according to how well I think the waiter/ess served me. If they did very well why should they have to share it out with someone I would have given less to?

Tell trading standards

Might that be fraud if the restaurant owner says it's going to the staff but instead trousers the lot?

A client of mine owns a very busy and successful restaurant. He works it so that all the tips (including card tips) are pooled and then distributed among the staff in accordance with a complicated system that basically spreads the tips out over the whole week and all the staff get a proportion depending on how many hours they've worked.

Kladdkaka -I do understand where you are coming from but think of the guys in the kitchen! If it wasn't shared out the guy who cooked your lovely lunch/dinner/cake wouldn't get a tip.

I worked in a bakery shop as a teenager and we had a Christmas box out every year, the owners (baker and shop manager) didn't take a cut but the rest was shared out between all the other staff, two bakery workers, two full timers, two part timers and Saturday girls and me!

15 yrs working in the industry, CC have always been kept by restaurant [where I am now staff when the customer try to leave tip with card payment just say no] Here it is divided as follows None to chef's or manager [on good wage] kitchen porters 10% of total tips which are then divided evenly by them so each get the same amount, Floor staff take total amount left, add every ones hrs and divide it into an hourly rate and then if they worked 10 hrs they get 10 times hourly amount.

Kladdkala if it is for a specific staff member jut say to them this is for you for the wonderful service then they can decide what to do with it but TBH I think most will choose to share as service is only good if the whole team work together

We used to share out all the tips at the end of a shift, taking the cc tip out of the till in cash and adding it to the jar! Until a new manager started but I left then anyway as she was a cowbag!

Is your restaurant privately owned or is it owned by a large company?
Check your contract for details.
In my pub, credit card tips get totalled on the print outs at the end of the night, this figure then gets split equally between every member of staff that was working that day (except salaried staff), put into a spreadsheet, and then at the end of the week I add the total figure to the wages, and it gets paid 4 weekly.
Cash tips are dealt with in exactly the same way, with lunch and dinner tips kept separate.
I know it is illegal for the house to use tips to make up staff minimum wage. However it's not right if they are saying on the slips that they go to staff when they don't.
Are you a member of a union? They might be able to help.

(sorry, should say cash tips are put into named plastic wallets in a drawer for staff to collect whenever, not put into pay check)

Is it illegal for restaurants to use tips to make up the minimum wage? Because I saw an advert today stating tips would be used to make up the wage ( I wasn't interested in the job, I just noticed it because I used to work there and tips used to be shared amongst the staff). I was thinking of phoning HMRC to report them.

I know of many places that still use credit card tips to make up the minimum wage so not sure it's illegal. I never tip on credit card anymore.

I never tip by credit card and I never pay the service charge. The whole thing makes me angry - tips are not left to make the owners or shareholders any richer - it is to thank the badly paid staff for a job well done.

If anyone is interested it was a national boutique hotel chain that rhymes with Salmaison. Cheeky fuckers and you can't even claim that they are cheap.

Before October 1st 2009 tips, gratuities, service charges and cover charges could count towards the minimum wage provided they were paid through the payroll. Since that date they do not count regardless of how they are paid. If a restaurant is paying its employees less than the minimum wage and using tips to make up the difference they are breaking the law.

he is misrepresenting the tips if he says they go to staff but do not - call trading standards. If no mention is made of where they go, he can keep them (bastard).
Always tip in cash.
Agree share should go to backroom staff (say 30%), but front of house should keep what they get individually, so better staff earn more

Thanks everyone. It is legal for restaurants to keep all tips, both cash and card, and it's legal for managers to take a cut of the tips if they want to.

Two of the other waiters and I had a meeting with the assistant manager on Sunday; basically what we wanted to ask was whether he would change the way the tips are divided up because the 2 waiters who make the decision about how much everyone gets were - obviously - pocketing the lion's share. They were talking about 50% of all the tips between them and then the rest was divided among the other 6 members of staff. The assistant manager was very sympathetic, said he'd meet with the owners and get back to us.

On Tuesday he had another meeting with us and told us that the system was not going to change, that all tips belong to the restaurant and that they don't have to give us a penny if they don't want to and that if we didn't like it we should start looking for new jobs. He was incredibly aggressive and hostile. Needless to say, we are all, indeed, looking for new jobs.

Don't bother giving great service as (just do an ok job) it will effect their business more than it will effect you.

Good luck on the job hunt.

It is legal for restaurants to keep all tips, both cash and card, and it's legal for managers to take a cut of the tips if they want to.

Yes it is, but it is not legal to say one thing to customers and do another thing once you have got their money.

Also, if someone in a restaurant is responsible for distributing tips they are responsible to HMRC for operating PAYE - see here. Shop the lot of them.

What happens to the 10-15% service charge payable by the customer? Isn't that supposed to be a kind of tip as well?

I hate that especially when a service charge is automatically added. I always leave a tip in cash if I can.

service charge almost always goes the restaurant. Always decline to pay it (perfectly legal) and leave a tip in cash

Thanks MrAnchovy! I reckon I'm going to do it.