Senate OK’s service charge bill on 3rd and final reading
THE SENATE approved today on third and final reading a bill which would allow restaurant and hotel employees 100% access to service charges collected from customers.
In a statement by the chamber on Monday, Dec. 11, Senator Joel Villanueva, principal author and sponsor of Senate Bill No. 1299, said restaurant and hotel workers were given only 85% of the total tips collected from customers while management retained the remaining 15%. He said the sharing distribution had not changed since it became law in 1975.
“On December 1975, then President (Ferdinand) Marcos institutionalized service charge into law under Section 14 or Presidential Degree 850. The collection of service charge was optional but any amount collected shall be distributed 85% and 15% in favor of employees,” Mr. Villanueva, chairman of the Senate committee on labor, employment and human resources development, said.
Once the proposed measure is enacted into law, restaurant and hotel workers, whether regular, contractual, or agency-hired, would be entitled to a 100% service charge as long as they would directly deliver the service to their customers, Mr. Villanueva said.
“The bill does not make the collection of service charge mandatory to avoid interference with the right (of) management to exercise discretion in the operation of their business. The proposed 100% service charge for our workers would benefit both the workers and the employers,” the senator said in his sponsorship speech.
At present, he explained, management gets 15% of the service charge proceeds to answer for losses or breakages. However, he said, if there were no losses or breakages, the 15% was the management’s prerogative for disposition or distribution among managerial employees.
In most cases, he said establishment owners thought the distribution of the service charge proceeds was a management prerogative. He cited a SparkUp survey, a multimedia platform of BusinessWorld, which showed that most of the staff did not receive their 85% tip.
Mr. Villanueva said the proposed measure seeks to “address the injustice brought upon our hardworking workers in the service industry who provide the actual service, but rarely get their proper share in collection.”
