An Asian restaurant chain has banned tipping by card, replacing it instead with “brand charges”, just months before new legislation makes it mandatory for staff to receive all tips.
Ping Pong, which operates five locations across London, will replace card tips with an optional 15% charge, which would go towards “franchise fees and other brand-related expenditure”.
It replaces a 12.5% service charge, 90% of which was given out to staff.
Ping Pong claims the scheme is an alternative to raising menu prices and is under review until June when management will listen to “all the constructive feedback before making a final decision”.
If the scheme isn’t adopted, the restaurant chain is considering hiking prices or implementing a mix of both.
AJT Dimsum, the chain’s owner, said it lifted workers’ hourly pay from £10.42 to £12.44 - £1 higher than the new minimum wage – and claimed the hike would “match earnings they would have received with service charge distribution.”
Staff can still receive cash tips from any customers and can see their hourly pay lift £1 to £2 higher if they meet certain sales targets.
Bryan Simpson, the lead organiser for hospitality at the Unite union, believes this is “a complete slap in the face” for staff at the restaurants.
“Ping Pong’s decision to effectively deny workers tips by cynically changing the service charge to a ‘brand charge’ in order to circumvent the new fair tips legislation is one of the most blatant examples of tips theft that we’ve come across,” Simpson said.