Mark Harris, a restaurant industry consultant, says: “With a service charge going back to them now [staff] can actually earn a very decent wage, which is really important, because it hopefully will bring people into the industry, which we desperately need at the moment.”
There were 107,000 vacancies in the hospitality sector in the three months to April, according to the Office for National Statistics. The industry was behind only healthcare and retail when it comes to the highest number of job openings.
Many bosses hope the incentive of extra earnings through tips and service charge will help make hospitality, a profession long-stereotyped for low pay and bad hours, more attractive to potential workers.
Tips are certainly one of the draws for workers in the US hospitality industry. However, the potential to earn significantly more through tips is reflected in wages.
Minimum wage in the US is just $2.13 for tipped workers, although some states have a higher minimum, compared to $7.25 (£5.75) in other professions.
The statutory minimum in the UK is already more generous, at £11.44 for anyone over 21.
British diners can therefore reasonably ask why they are being asked to top-up wages even more?
Therein lies the industry’s dirty secret: the entire business model is based upon that not-so-optional cost.
“If we remove this 12.5pc [charge], the Brits will give probably 5pc. But then all restaurants would have to make the price of a meal more expensive to be able to pay for [staff],” says Chris Galvin, the co-owner of Galvin Restaurants, a collection of upmarket British and French restaurants.
Attempts by some restaurants to find a solution have gone awry. The owners of Ping Pong, a chain of Chinese restaurants, were recently forced to defend its decision to scrap service charge altogether and replace it with a perplexing “brand fee” of 15pc, which was automatically added to diners’ bills.
The company said it had increased employees’ wages to offset the axing of service charge. It insisted the move would offer “stability of wages throughout the year, reducing the impact of seasonality”.
Tim Thorpe, finance director at Ping Pong’s parent company, said at the time: “Ultimately, we need to raise prices. And some of the feedback that we’ve received has been ‘why don’t you just raise the prices, it seems that you’re doing this a little bit under the counter’.
“But the perception of increasing your prices by 12 to 15pc is pretty horrendous. So that’s part of what we’ve got to try and manage.”
Gillies, the former Gordon Ramsay Restaurants executive, says: “If you stick 12pc on every dish and just say to customers it’s all included, the bulk of the public are really going to react and say no, that’s too expensive, because they judge it immediately at face value.”
Be that as it may, diners and drinkers finding their bills are higher than expected because of service charges hidden in the small print may argue things have already become too expensive.