Does Service Charge Actually Reach Hotel Staff, Asks Union Minister Ram Vilas Paswan

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Does Service Charge Actually Reach Hotel Staff, Asks Union Minister Ram Vilas Paswan

Ram Vilas Paswan is the Union Consumer Affairs Minister

New Delhi:  Union Consumer Affairs Minister Ram Vilas Paswan today said that hotels and restaurants should publicly declare how much of the service charge, even if paid voluntarily, actually reaches the staff. 

"Some hotels say that they distribute 30 per cent of the service charge collected from customers to their staff. Does the service charge reach the employees," asked Mr Paswan.  At present, it is not known "how much or if at all fully or a part of the service charge" is distributed among the hotel staff, he added.

“So, it is necessary that hotel and restaurant owners maintain a record and make it public,” Mr Paswan said.

The government had, last week, approved guidelines which gave consumers the choice to pay or not pay service charge on hotel and restaurant bills. 

As per the new guidelines, service charge is not to be incorporated in a hotel and restaurant bill. In fact, the column of service charge should be left blank to customers to fill up before making the final payment.

"Hotels and restaurants should not decide how much service charge is to be paid by the customer and it should be left to the discretion of the customer. If there is mandatory levy of service charge, customers can file a complaint in the Consumer Court," he said elaborating on guidelines. 

More awareness among consumers is need of the hour because other businesses offering services like salon are also levying service charge, a senior Consumer Affairs Ministry official said.

Hefty fines and stringent action against violation cannot be taken at present as the current Consumer Protection Law does not empower the ministry to do so.

However, the new Consumer Protection Bill under which an authority will be set up will have powers to take action, Mr Paswan added. 

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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