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Wed 21st Oct 2015 - BHA calls for compulsory disclosure on tips distribution
BHA calls for compulsory disclosure on tips distribution: Restaurants and hotels should be legally required to tell customers how service charges and tips are distributed among staff. That’s the message from the British Hospitality Association (BHA) in a new initiative proposed to Business Secretary Sajid Javid. The BHA – which represents 40,000 hospitality establishments in the UK – wants the government to introduce legislation to make businesses reveal exactly what happens to the ‘extras’ customers pay at the end of a meal. “For us it’s all about transparency,” said Ufi Ibrahim, chief executive of the BHA, which has outlined the proposal in a letter to the Business Secretary. “Although restaurants are legally entitled to deduct administration costs from service charges, for example, we think it’s important the customers understands exactly how much is deducted and why. Customers should be able to reward good service and know where their money ends up and how much of it goes to the staff.” Many restaurants and hotels have signed up to the British Hospitality Association’s voluntary code of transparency on tips and service charges. But now the BHA wants to make it a legal requirement. The BHA wants to end confusion among customers about who is entitled to service charges. Ibrahim added: “Restaurants are legally entitled to deduct credit card and administration costs from service charges. But we think it’s important that customers understand how much is deducted and why. Customers should be able to reward good service and know where their money ends up and how much of it goes to the staff.” Following concerns raised in the media, the government launched an inquiry into the issue. The Department for Business, Innovation and Skills has called for evidence into how cash and non-cash tips, gratuities, cover and service charges are collected and how much employers deduct from their employees. The inquiry does not only cover the hospitality sector but goes much wider, extending to other industries where tipping is prevalent, such as hairdressing and casinos. The deadline for responses is 10 November.


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