Hands off the service charge

PHNOM PENH Hotel and restaurant representatives have rejected a proposal from Cambodia’s Ministry of Tourism that would require the hospitality industry to hand over a portion of the service charge to support an industry-wide training fund. The ministry, last week, set forth a plan to redistribute part of the service charge – typically added to a customer’s food or hotel bill. It is collected directly by hotels and is intended to supplement staff pay. The government believes part of the service charge could fund “capacity building” (training) in the hotel sector, but there is little support from hotels. Phnom Penh Post quoted Cambodia Restaurant Association president, Sok Ly, as saying the ministry’s proposal presented no details on what percentage of the service charged would be taken or how the fund would be managed. inside no 1“Why do we need to give it to the Ministry of Tourism. Service charges belong to the staff,” he told the local daily newspaper. The move would be unprecedented as the common practice is to give the service charge to staff with a small percentage retained for what hotels call “breakages”. Hotel guests assume the charge supports staff and would be seriously concerned if they thought it was being given to the government that already benefits from hotel sales tax. Even if the hotels agreed, staff and labour unions would not. Also in principle some hotels would say the government has no right to suggest it can make use of a service charge which is private sector revenue outside the scope of tax collection or government intervention. Last December, the ministry held a meeting with the CRA, when it proposed that 70% of the charge should go to employees, 10% to the hotel or restaurant and 20% would go to a fund for training of staff, the report said. While they would abide by the law, the president said: “It isn’t the MoT’s responsibility to recruit the staff for the owners. I don’t think so, right”. He added that every establishment had their own training requirements and getting staff trained using this fund would not be helpful, as each restaurant or hotel would have to re-train them based on their specific needs. Industry representatives said they were incensed by the argument presented by government. “For me if you want to help the industry get bigger, they have to find other ways to support . Not by taking it from the staff allowances.” Ministry of Tourism general director, Neb Samouth, said the proposal was only at the discussion stage on ways to set up a code of conduct to govern the appropriate use of the service charge. “The biggest part of the service charge would still go to staff; some would go to the fund, which we plan to set up for staff capacity building and offering them training to upgrade their skills,” he said. “It is the first round of discussion, as we want to avoid any problems, which we previously had – for instance, some hotels didn’t fairly allocate the money.” “I think some hotels and restaurants misunderstood our intention because we just want to make clear on the use of the service charge and to set up a code of conduct, and set up a committee. It is on a voluntary basis,” he cited. sourced:ttrweekly.com