Thai Supreme Court Rules On Employers Keeping Service Charges!

[Jingthing]

This is of interest to those of us who have become aware that some Thai restaurants charge a mandatory service charge, and then keep all or most of that money for themselves!

Now it is ruled, the maximum the owners will be LEGALLY allowed to keep is 22 percent and the remainder MUST be distributed to the staff.

Assuming the owners follow this rule, I think restaurant customers can now more comfortably hope that that the service charges they are forced to pay CAN be considered as part (or all) of the TIP.

Yes I realize there will be scofflaws, but not sure how much insider information restaurant customers are realistically supposed to be involved with:

The Supreme Court has also ruled that an employer could keep 22 per cent of the service charge for workers' welfare and share the rest among the staff, he said.

I would also suggest if you encounter Thai waiters who tell you their employer is stealing all of the service charge money, that you inform them that they should contact the Thai labor authorities. Really, this isn't the customers problem anymore. This is the LAW. Thai people, owners and workers, need to take responsibility for making sure this is actually enforced.

Yes, I am saying, if you are forced to pay a service charge, now you SHOULD consider that money as part of a tip and adjust your actual tip accordingly. In many cases, that will mean no additional tip, but that's of course your choice.

http://www.nationmul...e-30178480.html

Edited March 22, 2012 by Jingthing

[cattoc]

we are a restuarant and bar that does not add a service charge (unlike our previous owners) and also are a sole proprietry business (non VAT) we dont erroneously charge VAT on bills and not pay up. We have begun to share 1% sales with the staff actually taking orders but only if the stock reconciles <5%.. which it does now.. .and then we allocate 50% of EOY profit to to a staff legacy fund (which we paid out entirely last April) .. we pay social security and workers compensation for all staff under 65 (and contribute to a reserve fund for those too old to be allowed to maintain their social security entitlement). We have 3 staff who have worked here for 47 years. another 4 staff who have worked here 27 years.. we give prioroty of employment to bona fide single mothers... and no surprises all of our 38 staff are happy campers and almost no shrink....turning a loss making bar into a profitable one the month we took it over. Only problem is I cant get a free beer there any more....what's good for the goose.....

[Jingthing]

That's nice and I'm sure it's complicated and challenging to operate a restaurant in Thailand, or anywhere. However, my intention in starting the topic was about businesses that actually DO charge a mandatory service charge.

[TallGuyJohninBKK]

I'd always assumed that the usual 10% service charge here WAS the tip... apart from the 7% VAT that's often added on.

If the establishment mandates that I pay 10% regardless of the service, then I normally won't volunteer more.

If the establishment doesn't mandate the SC, then I'll usually tip more than 10% assuming the service is at least decent.

I really dislike having the tip as a business instituted requirement. But if it's voluntary, 99% of the time I'm going to give a larger tip than the 10%.

[IanTheGeek]

I have only seen service charges in international and brand restaurants. I do not agree with service charges being hidden, I want to pay the price I am quoted so always count the service charge as the tip. Sorry but the staff at these places should get good enough wages.

[Jingthing]

In Pattaya, some of us have been following this issue, and have gathered credible evidence that some restaurants charging 10 percent service charge are simply not giving it to the staff at all, or only giving a portion, such as 50 percent. As many of us have been assuming this charge was going to staff and could be seen as a tip, this was a bit of a wake up call. It is good to hear the Thai supreme court sees this as an important enough issue to take action on it. It is not always chains that collect service charges.

[DP25]

Wow, great news!

Big chains are surely going to follow this, which is great, but most small restaurants just pay under the table and I imagine some will still try to keep the money. At least we know now that is illegal though

[smokie36]

Wow, great news!

Big chains are surely going to follow this, which is great, but most small restaurants just pay under the table and I imagine some will still try to keep the money. At least we know now that is illegal though

I don't know of any small places charging this really. If it brings the chains into line then its a great ruling.

I hope its been well publicised in the Thai newspapers and media.

[Ulysses G.]

Good news. The employers should not be able keep any of the service charge, but for Thailand, this is a very progressive ruling.

Edited March 22, 2012 by Ulysses G.