An investigative report by the Evening Standard alleges that a popular UK chain Côte is misleading customers with its tipping policy. Workers at the restaurants say that the company asks them to lie to customers telling them that the 12.5 percent automatic service charge goes to workers, when it actually goes to the restaurant. A staff reporter for the Evening Standard who posed as a diner further verified the practice.
Côte, which operates 72 restaurants in the UK, automatically adds the charge to bills and customers must request them to be removed. A worker explains:
We are told by management that we don't get to keep the service charge because we get paid more than the minimum wage, so we should be grateful, but most of us would prefer earning the minimum wage and taking home our tips for the hard work we do.
Another staff member claims that the policy isn't just reserved to credit card tips: "One night I was waiting a large group and had to split the bill for each guest. At the end they left a £100 cash tip, but I was forced to hand it over to my manager and never saw that money again."
In a statement to the Evening Standard, the chain defended its practice saying it allows the company to pay staff an hourly rate above the national minimum (but still below the London Living Wage). However, the company changed its tune when speaking with the Telegraph, stating that all tips are pooled and redistributed to employees through payroll and "the company does not recognize the service charge as revenues in its accounts." Côte further denies claims that it takes cash tips from servers. "Company policy is that where customers leave a cash tip, it is at the waiters' discretion to keep it for themselves or to include it in a general pot with other members of staff. Any deviation from this policy will be investigated and disciplinary action taken where appropriate."
"Unfortunately, in the eyes of the law the ‘service charge' belongs to the company, but it is entirely misleading."
The news comes as unions have launched protests against UK chains for charging an 8 percent service fee on tips charged to credit cards. Dave Turnbull, a food and drink officer for Britain's largest trade union Unite made a statement to the Evening Standard: "Unfortunately, in the eyes of the law the ‘service charge' belongs to the company, but it is entirely misleading." A government official, Ian Wright, expressed his outrage for the policy, adding that he plans to bring up the issue at a committee meeting. "There's a principle of making sure the tips that you give over and above the bill of the restaurant is given to the staff. It's hugely important and should be given 100% to the staff to show your thanks."
Côte isn't the only business accused of taking tips from its staff. In 2013, Wolfgang Puck's catering company was slapped with a class action lawsuit accusing the company of charging customers a service fee and then failing to pass it along to servers and bartenders. Two Minnesota-based chains were also publicly shamed into reversing a policy that charged customers a service fee on credit card based tips.