Changes to minimum wage this October

[battleofthebulge]

Talking today to someone at work whose friend manages a well known and expensive London restaurant with a view. Said friend reckons that the up-tick in the minimum wage due in October also comes with extra rules which will no longer allow restaurateurs to top up their staff wages (actual wage well below the minimum hourly rate) with the monies received from the service charge. This will mean that the service charge will be reduced to around 7% but food prices will go up by at least 10%. Friend of friend also claims that there are quite a few restaurants in London who don't pay their FOH staff anything at all apart from the tips.

This raises any number of questions in my mind. For a start, I can't find anything on the directgov pages which mention the change in rules for tips. And I certanly can't see any restaurant reducing the service charge. And are there serious restaurants in London who are currently getting away with paying wait staff no guaranteed salary?

What have you lot heard, if anything?

Sarah

[PhilD]

Talking today to someone at work whose friend manages a well known and expensive London restaurant with a view. Said friend reckons that the up-tick in the minimum wage due in October also comes with extra rules which will no longer allow restaurateurs to top up their staff wages (actual wage well below the minimum hourly rate) with the monies received from the service charge. This will mean that the service charge will be reduced to around 7% but food prices will go up by at least 10%. Friend of friend also claims that there are quite a few restaurants in London who don't pay their FOH staff anything at all apart from the tips.

This raises any number of questions in my mind. For a start, I can't find anything on the directgov pages which mention the change in rules for tips. And I certanly can't see any restaurant reducing the service charge. And are there serious restaurants in London who are currently getting away with paying wait staff no guaranteed salary?

What have you lot heard, if anything?

Sarah

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We discussed it on the board earlier in the year, the Independent had a campaign about it. It will be interesting to see the impact on bills. It may impact the chains the most, as this is a highly competitive sector I expect companies to be keeping a close eye on each other and for us to see some interesting pricing strategies, after all consumers are spending less not more at the moment.

http://www.independent.co.uk/news/uk/home-...ns-1680398.html

http://www.articlesnatch.com/Article/Chang...islation/669063

[confiseur]

Hmm....its myths and legends time again folks...cue much hand wringing from hoteliers and restauretures about how they are going to be driven to the wall by paying a few pence more than the minimum wage..

Fact is the catering industry is notoriously padly paid and said restaurant owners are the first to start whining and crying that 'you just cant get the staff'...wonder why lol

[Harters]

It may impact the chains the most, as this is a highly competitive sector

Should indeed be interesting particularly with many chains heavily discounting with "2 for 1" offers.

Following the recent press stories, I now always tip in cash in a chain. I also don't see why staff should be penalised in their tips because their employer is discounting - so I tip at "full rate" as though there was not a "2 for 1".

[PhilD]

Hmm....its myths and legends time again folks...cue much hand wringing from hoteliers and restauretures about how they are going to be driven to the wall by paying a few pence more than the minimum wage..

Fact is the catering industry is notoriously padly paid and said restaurant owners are the first to start whining and crying that 'you just cant get the staff'...wonder why lol 

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The interesting thing for me is that the only real beneficiary is the government (and that is rarely commented upon). The employers NI bill will go up, and that money will either come from increase prices, reduced profits, or reduced costs (take home pay). I suspect the net impact to earnings will be negative, as the "law of unintended consequences" kicks in.