The work behind calculating service fees

The work behind calculating service fees

Photo: IENS


  • Consumers call for an end to restaurant service charges
  • Restaurant owners say service charges are essential or staff retention
  • The government intervenes to end the rupture

(By Gulshan Sharma)

New Delhi: What is the most laborious task in a restaurant?

It’s definitely not cooking. Or cleaning. Serve customers? Close but probably not the best guess.

To solve this puzzle, you will have to go back in time. Karl Marx proposed that workers sold their labor power to capitalists for far less than their output was worth. The process resulted in surplus value which then enabled the capitalist to pay the workers and give them more work to do.

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From now on, any employer will have to make enough profit to keep the business running and continue to pay the workers.

But these are strange times and Mr. Marx is long gone.

In fact, Mr. Marx, never in his wildest dreams could have imagined that a day would come when employers would take customers head-on for the benefit of workers.

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But that is exactly what is happening. A utopian dream!

Gurbaxish Singh Kohli is the Vice President of FHRAI or the Federation of Hotel and Restaurant Associations of India. And he fiercely defended the rights of restaurants to levy a service charge or what many would call mandatory tipping that sneaks up on the final bill.

Mr. Kohli was quoted by The Economic period as it is said, “the service charge is considered a beneficial payment since it is intended for the benefit of the personnel of the establishment. Thus, some establishments make a conscious choice to adopt an advantageous policy towards their members of staff by assuring them a minimum tip which is a percentage of the rest of the charges. There is nothing illegal or against the law for restaurants to charge service fees.

And that brings us back to a restaurant’s most laborious task.

Should we be petty enough to ask the restaurant to remove the service charge or should we help the restaurant owner (the capitalist) in the new cause of supporting the staff (the workforce)?

As if all of that weren’t enough, some restaurants just won’t charge taxes either, let alone a service charge.

The painstaking work of calculating the loss of government revenue and the value of the server’s labor in such a scenario is probably an exercise best left to Mr. Marx.

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