Senate bill on service charge hurdles 2nd reading

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THE SENATE on Tuesday passed on second reading Senate Bill 1299 which seeks to distribute among covered employees the entire 100% and not just 85% of service charges collected by hotels, restaurants and similar establishments.

“The proposed 100% service charge for our workers will benefit both the workers and the employers. Our minimum wage earners can receive additional compensation for good quality service,” said Senator Emmanuel Joel J. Villanueva, who introduced the bill.

Mr. Villanueva, who heads the Senate committee on labor, employment and human resources development, said in his sponsorship speech on Monday that “for more than 40 years now, hotel and restaurant workers have long been calling for the passage of a law that will make tips and service charge fully distributable to all employees.”

As stated in the bill, “currently, Article 96 of the Labor Code provides that employees are entitled to only 85% of the service charge paid by customers in hotels, restaurants and similar establishments.”

Hence, “this bill seeks to address the concerns of the workers in these industries to distribute 100% of the service charge collected among the covered employees.”

“Unfortunately, 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,” Mr. Villanueva said.

He added that many establishment owners “think that the distribution of service charge proceeds is a management prerogative,” citing an informal survey of restaurants conducted by SparkUp, the multimedia platform of BusinessWorld, which showed that a number of waitstaff claimed they do not get their 85%.

For her part, Senator Grace Poe, who co-sponsored the bill, said: “These covered employees — our waiters, bell boys, parking attendants, valet parking drivers, cooks, kitchen crew, dishwashers and other personnel or staff whose services are crucial for the management and the establishment’s customers and patrons — should share in the total collection of service charges.”

“This service charge will not only augment their income but will also act as an incentive for them to do better,” she added. — Arjay L. Balinbin