Senate OKs bill on service tip for resto, hotel workers on final reading

The Senate has approved on third and final reading a bill which would allow restaurant and hotel employees 100 percent access to service charges collected from customers.

On Monday, Senator Joel Villanueva, principal author and sponsor of Senate Bill No. 1299, said that at present, restaurant and hotel workers are given only 85 percent of the total tips collected from customers while management get the remaining 15 percent.

He said the sharing distribution had not changed since 1975, when it was institutionalized under Section 14 of Presidential Degree 850 by former Ferdinand Marcos Sr.

“The collection of service charge was optional but any amount collected shall be distributed 85 percent and 15 percent in favor of employees,” said Villanueva, who is also the chair of the Senate committee on labor, employment and human resources development.

Once the proposed measure was enacted into law, the senator said restaurant and hotel workers, whether regular, contractual, or agency-hired, would be entitled to a 100 percent service charge as long as they would directly deliver the service to their customers.

“The bill does not make the collection of service charge mandatory to avoid interference with the right to management to exercise discretion in the operation of their business,” Villanueva said in his sponsorship speech.

“The proposed 100 percent service charge for our workers would benefit both the workers and the employers,” he added.

In most cases, Villanueva said establishment owners thought the distribution of the service charge proceeds was a management prerogative.

Citing data from the Department of Labor and Employment (DOLE), the lawmaker said that from ‎‎2014 to 2017, around 621 establishments out of 212,641 inspected nationwide violated labor provisions on service charge.

The bill, therefore, seeks to solve the “injustice brought upon (the) hardworking workers in the service industry who provide the actual service, but rarely get their proper share in collection.”