Waiters fear loss of income after clampdown on illegal surcharges

Tips an 'important part of income' but Government reiterates warning that repeat offenders face steep fines

ABU DHABI // Waiters and kitchen workers are worried the ban on service charges in non-tourist restaurants and cafes will cost them part of their livelihood. "We get a commission based on how much we sell," said one waitress at a cafe in Marina Mall. "They would include the service charge when they calculated our commission. But now that this charge is not counted, it means we sell less. So we have to push harder to make the same amount of sales."

Last week, Sultan al Mansoori, the Minister of the Economy, called service charges illegitimate price increases. He said they were illegal under the 2006 consumer protection law and ordered restaurant managers to stop imposing them. The ban does not apply to so-called tourist restaurants, which are found mostly in hotels around tourist sites, and are licensed by tourism authorities rather than by the emirate's Department of Economic Development.

Waiters in the non-tourist restaurants fear their wages will go down, even though few of them ever received more than a tiny portion of the surcharge. They all asked for anonymity to protect their jobs. A waiter at a Marina Mall restaurant was particularly worried about the effect of the law on cooks and other people who work in the kitchens. "Typically, we servers only get less than five per cent of the total service charge the restaurant receives," he said. "Our wages are low and this helps our salaries, especially because not many people leave tips. This new law means that the cooks now do not even get that small amount added to their salaries. Maybe we waiters can earn tips but what about them?"

Several restaurant managers acknowledged that staff were often paid less than five per cent of service charge revenues. They claimed most of the money goes to maintenance and unspecified staff benefits. While the law has technically been in effect for three years, Fareed al Zubi, the development department's chief lawyer, said restaurants would probably first receive warnings from inspectors but that repeat offenders would be subject to significant fines because levying the charge would be considered a form of "fraud and predatory practice".

The consumer protection law stipulates a minimum fine of Dh10,000 (US$2,720) for establishments that violate the measure. The Ministry of Economy has the authority to close repeat offenders. The 2006 tourism regulation law metes out even harsher punishments to tourist restaurants that do not give their staff at least 20 per cent of their service charge revenues. These restaurants face up to Dh200,000 in fines, as well as closures, for violating the law.

The ministry reiterated its position on the ban this week, announcing that it would soon begin inspections that could lead to significant punitive measures against restaurants that defy the law. The ban has given rise to fears that restaurants would increase their menu prices, or pass on the losses to staff members. kshaheen@thenational.ae