Service charge bill reaches Senate plenary – Sen. Villanueva

A bill proposing that all service charges and tips collected in hotels and restaurants be given to employees has reached the Senate plenary for deliberation, according to Sen. Joel Villanueva.

Villanueva, chair of the committee on employment and human resources development, said Tuesday that he has endorsed Senate Bill (SB) No. 1299 to the plenary.

READ: Senate bill proposes 100% of tips to go to hotel, resto employees

The senator said that while the collection of service charges was optional, those collected by hotels, restaurants and similar establishments were being divided between the employees and the management at 85 percent and 15 percent, respectively.

“Mr. President, sa nakaraang mahigit apat na dekada at hanggang ngayon, kapag kumain ka sa isang restaurant o café na nag-cha-charge ng 10% service charge for food that costs one thousand pesos, the 100-peso service charge will be divided between the rank and file employees and the management. The 85-peso share will be divided among the restaurant staff and the remaining 15-peso share will be management’s share,” Villanueva said in his sponsorship speech.

“Theoretically, this means that while the employees get the bulk of the collected service charges, the management still takes a cut of the service charge added to bills.”

“In actual reality, unfortunately, Mr. President, some establishments interpret this provision of 85% for the staff and 15% for the management as a ‘minimum standard.’ There are claims that employers would stipulate in job contracts that 90% of the service charges will go to the management and only the remaining 10% goes to the employees,” Villanueva said.

Moreover, the senator said, many establishment owners thought that the distribution of service charge proceeds was a “management prerogative.”

He cited an informal survey of restaurants conducted by SparkUp, the multimedia platform of Business World, in Quezon City, which asked wait staff if they get their 85% share of the service charge. The majority response was “it’s the other way around.”

“Ibig sabihin, Ginoong Pangulo: 85% – 90% napupunta sa management at ang natirang 10% – 15% ang pinaghahatian ng mga manggagawa,” Villanueva said.

The senator said that under SB 1299 the collection of service charge would not become mandatory “to avoid interference with the right of management to exercise discretion in the operation of their business.”

The committee, he said, believes that a mandatory imposition of service charge might be “economically harsh” to businesses that wish to keep their prices lower to be more competitive.

“The proposed 100% service charge for our workers will benefit both the workers and the employers. Kaya, Ginoong Pangulo, win-win po tayo dito,” he said.

“The ‘service charge’ is a mandatory tip of sorts – a simple token of gratitude for a service whole heartedly rendered by workers in hotels, restaurants and allied industry but only if it’s given to them 100%,”, Villanueva said. /cbb