Enforcers Deployed To Check On Service Charge Implementation
PETALING JAYA: Domestic Trade, Cooperatives and Consumerism Ministry’s enforcement officers have started checking on hotels and restaurants to ensure that those imposing service charges meet the ministry’s new requirements.
They want to know the percentage the operators are charging and whether they have an employer-employee collective agreement (CA) or are they displaying a notice on service charge.
On Monday, the ministry’s secretary-general Datuk Seri Alias Ahmad said hotels and restaurants must have a CA in order to impose service charge and they must also display a service charge notice.
The ministry’s enforcement director Mohd Roslan Mahaydin told China Press that in compliance with Alias’ directive, he has ordered his staff who are carrying out the Goods and Services Tax (GST) enforcement to also check on hotels and restaurants to ensure they meet the service charge requirements.
He said enforcement officers will request restaurant or hotel operators to show their service charge rate before they inspect the premises to see if notices of service charge are displayed.
“Finally, the officers will ask the operators to produce their CA,” he added.
Meanwhile, Malaysian Employers Federation (MEF) executive director Datuk Shamshddin Bardan said up to 75% of the take-home pay of employees in the service industry comes from service charges collected, as their basic salaries are very low.
He said the service charge mechanism has been around since the 70’s and is intended to prevent individual employees from personally pocketing tips from patrons.
On the new rules on service charge, Shamshddin said CA was a rather complicated matter and was not something that could be formulated at an instant.
“Operators who do not have a CA will need time to negotiate with their employees for it.”
Furthermore, he said, employees need to have a union in place to fight for their benefits during the CA negotiation.
He said employees of 95% of the smaller and budget hotels in Malaysia are not represented by any union.
He warned that the immediate enforcement of the new service charge rules without looking into the CA issue would only jeopardise the income of those employed in the service industry.
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