Why it’s time to end the scourge of the service charge
Ask five people about service charge – that innocent looking ‘discretionary’ or ‘optional’ 12.5 per cent right at the bottom of your bill – and you’ll get five different answers. It’s an archaic, often clandestine system and I’m glad to have scraped it at our restaurant Oklava. Here’s why.
Service charge never sat right with me or my business partner, but as two fresh-faced, starry-eyed, debt-laden restaurant owners just shy of their 30th birthdays, we didn’t have the confidence to break the mould. Being the only restaurant in London to incorporate service charge into the menu prices felt like one step too far.
Then coronavirus broke the mould for us. You see, for years the government has been encouraging us to use a system called tronc, which it describes as “a separate organised pay arrangement… used to distribute tips, gratuities and service charges,” which is run by a person called, hilariously, a “troncmaster”. In theory it should lead to a fairer allocation of tips among staff but in practice some of the money tended to end up in the pockets of shady proprietors.
But tronc wasn’t considered in the furlough scheme, meaning thousands of hospitality staff received only 80 per cent or even 50 per cent of their original wage – a kick in the teeth when they were already down. As well as giving us a major financial headache it made us realise that for far too long we had accepted unworkable margins and untenable practices in the name of love for food and wine.
The truth is, service charge is optional for guests, but for the hospitality industry it is not. The bill that arrives at the end of your meal doesn’t just cover the price of the ingredients and staff, there’s also rent, rates, VAT, fuel, cleaning products, laundry, maintenance, training, stationary, PR and marketing – and that’s before you even consider any profit. Without that 12.5 per cent service charge, we wouldn’t be able to pay our highly skilled staff the wage they deserve and keep the restaurant afloat.
Service charge is held as an implicit threat against restaurant workers. Most people can have an off day without their wages getting cut but hospitality staff are held to ransom on a daily basis. Just because your waiter has had a nightmare shift doesn’t mean the kitchen porter should take home less money.
My team have chosen to make hospitality their career. They have put in the hours to learn about the subtleties of my grandma’s bread recipe, the origin of fine wines in Armenia, the fine art of making you feel at home, the dark magic of temperature variations within a single charcoal grill. If you don’t like what we do, we can accept that. But we’re no longer prepared to allow people to show their displeasure by cutting our wages.
Service charge is now incorporated into our menu prices. What you see is what you pay. At first glance it may look like you’re paying more for the same experience, but we promise you it’s what you would have paid before – only now you can be confident the money goes towards a healthy, viable restaurant with staff that are paid what they deserve.