e-book The Extra One Per Cent: How small changes make exceptional people

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The Extra One Per Cent

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Audio is an overlooked dimension of the customer experience — Interview with Jeff Yasuda of Feed. Maz Iqbal March 6, at am - Reply. Adrian March 6, at am - Reply. But Coveney was incorrect — it is not illegal at the moment for employers to keep tips, which is why there is a concerted effort to do something to protect the gratuities of lower-paid precarious workers in the hospitality sector. The Restaurants Association of Ireland favours a voluntary code; president Liam Edwards said in March that tips were a major issue facing restaurants, which its chief executive, Adrian Cummins, and Minster for Employment Affairs Regina Doherty discussed.

I think the customer is looking for transparency and confidence that when they tip for good service that the money goes directly to staff.

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A voluntary code may not be sufficient. A Sectoral Employment Order could easily address this issue. Gavan says they have worked well in the security and cleaning sectors. Transparency is essential if there is to be any sense of fairness — and avoid disgruntled staff. Who handles and manages distribution of tips — staff or management — is a factor in transparency. It is also arguable that if service charges or tips are retained or part-retained by the owner, that money should instead be added to the displayed menu prices.

For a member of the public eating out, there is uncertainty when presented with a bill.

The Extra One Per Cent by Rob Yeung

The advice from service staff is to look properly at your bill. If there is a service charge, always ask where it goes.

If you are considering a tip on your card, ask the waiter where it goes. And act accordingly. If a service charge is not going to staff, you can politely say you would rather not pay it and leave a tip instead. And basing tips on percentages, rather than the amount and quality of service, is irrational. Some people hold a more radical view: that there is a problem with the whole concept of tipping.

Scholars point out that tipping is a legacy of slavery and racial oppression in the US; part of the reason it is less ingrained in Europe. Perhaps the simplest solution would be for restaurants to pay staff adequately for the job they do — and do away with tips altogether. The tipping economy in Ireland is not so much a grey area as a pitch black sensory deprivation chamber. There is a yawning absence of data. No one knows how much cash is scooped off saucers or rattled out of tip jars or how fairly it is distributed.

This is true of tips distributed to wait staff or kept by their employer. If tips are distributed to wait staff by the business then that restaurant should be deducting tax, says the Revenue spokesman. The commission said the lack of data on tips was a major obstacle to figuring out a fair solution for low-paid workers. An unknown portion of tips is paid in cash. Wait staff who get their share in a divvy up at the end of a shift are in theory obliged to declare those tips to Revenue and pay tax on them if they are big enough to bring them into the tax net.

Technically, every lounge boy or student waitress should tot up the change and crumpled fivers, lodge them to a separate bank account to keep track and file a tax return as a self-assessed taxpayer. So how much tip income is declared under the self-assessment system by wait staff, The Irish Times asked the Revenue Commissioners.


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So how many wait staff are registered for self-assessment? The omerta around tips, cash or otherwise, leaves already low-paid workers vulnerable. There is a fear that employers might threaten to report workers to the tax authorities in order to silence them. For this reason, some workers in the hospitality industry are advocating for legislation that requires all tips to be tracked and reported.

This is the system that operates in Quebec, where the Protecting Employees Tips Act came with an obligation on hospitality workers to declare their tips. In Germany, the commission noted, this openness about tips went one step further. The logic behind this decision was that those dependent on tips generally work in the low-wage sectors of the economy and that the current state of the law only encouraged them to work in the black market.

If it is impossible to legislate for tips and service charges, then simply ban restaurants charging service charges. I do not accept it is impossible to legislate to provide tips to staff. There is just not the political will to do so. Other changes in consumer behaviour may bring the era of the cash tip to an end. As food service businesses go increasingly cashless wait staff may be further separated from access to tips.


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Figures from the Central Bank show a huge increase in debit cards used to pay for restaurant and dining expenses in December Bord Bia predicts the restaurant and cafe sector will increasingly move to cashless transactions. Leaving a tip on a card requires the consumer to trust that the business is going to pass the payment to wait staff. In the absence of a clear picture of the tip economy and regulations to ensure fairness, that feels like more of a leap of faith than ever.

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