The steakhouse chain Miller & Carter has faced criticism for withholding up to 2 percent of waiting staff’s tips.
It impacted staff earnings amid the ongoing cost of living crisis.
The rationale behind these deductions is to redistribute tips to chefs and other back-of-house employees.
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However, the Unite union and waiting staff said this system frequently results in tips and service charges falling short of the amounts owed to their colleagues.
In one case, an employee claimed the amount they lost due to tip-sharing pushed their earnings below the minimum wage for a shift.
Over the past month, numerous Miller & Carter branches have introduced a new sharing system.
It follows staff votes that determine the distribution of service charges, cash, and card tips.
While not all restaurants have adopted the same policy, roughly a third of the chain’s 124 restaurants now use a percentage of sales as the basis for tip-sharing.
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Some outlets have imposed nightly caps on payouts, ranging from £20 to £40.
Nevertheless, the union said these caps can still exceed the amount earned in card tips.
Before this change, many waiting staff shared their tips by paying a fixed “plate fee” of less than £10 per shift, adjusted based on the day and time of their shifts.
Alternatively, some restaurants shared a percentage of the service charge collected.
Under the new system, waiting staff may lose a substantial part of their monthly income which coincides with rising household expenses.
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Currently waiting staff’s level of tips and service charges is unpredictable and not directly linked to sales.
The firm typically doesn’t add a service charge to customer bills, except for tables of eight or more.
A shift towards card payments during the pandemic has resulted in fewer cash tips.
Waiting staff have found themselves with fluctuating and unreliable incomes, which, in some cases, are insufficient to cover their costs.
However, employees are reluctant to challenge the system out of concern for their job security.
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Bryan Simpson, the lead organiser for hospitality workers at Unite, said: “This is one of the worst tips policies we’ve ever come across because it forces low-paid workers to find tips that can never be guaranteed.
“Our members are already losing hundreds in lost income.
“There is a strongly held fear among our members that they will be brought below the minimum wage by this system.
“Put simply, this is an undemocratic and unworkable policy, which is designed to force low-paid waiters to make up for the failure of the company to pay their kitchen, bar and junior management enough.”
