26 November 2021
In many restaurants, employees earn far more than the minimum wage just in tips that they receive from customers. In Johannesburg and Pretoria, restaurants fall under the jurisdiction of Bargaining Councils, and in the remainder of the country, restaurants are governed by the Hospitality Sectoral Determination.
Minimum wages are prescribed for restaurant employees, and it is imperative to ensure that there is compliance with same. The question then arises that if an employee earns more than the minimum wage in their tips every month, is a company still obliged to pay the employee the minimum wage in addition to their tips? Simply put, the tips that an employee receives do not form part of their minimum wage, and they must therefore still receive at least the minimum wage for every hour worked.
Some restaurants use commission waiters, who earn a certain percentage of commission per sale that they make. Where the commission that these waiters earn is less than the prescribed minimum wage, their wage per hour worked needs to be topped up to at least the minimum wage applicable for waiters. It is furthermore clearly stated in all provisions relating to commission waiters that any tips that they receive do not form part of their minimum wage, and they therefore also have to at least receive the minimum wage for each hour worked, regardless of their tips that they may receive.
Restaurants have been facing many financial challenges as a result of the COVID-19 pandemic and many will struggle to comply with paying minimum wages to their employees. There are provisions for instances such as this where companies that are facing financial hardship can apply for exemption from paying the minimum wage prescribed.
In the relevant Bargaining Councils, restaurants can also apply for exemption from other provisions such as the payment of an annual bonus, which is a huge expense to pay, especially in the current economic climate.
It is important to comply with the provisions applicable to the area in which your restaurant is located. If for financial reasons you cannot do so, it is safer to apply for an exemption from certain provisions, and then if the exemption is granted, there is a lawful reason to not comply. Failure to comply can result in penalties, and backpay being payable to employees, which can have devastating effects on a company.
Should you wish to apply for such process of exemption, Invictus can assist in compiling such an application, and submitting same to the relevant Council or Department of Labour for determination. Please contact Invictus to assist you in applying for such exemption process, and thereby reducing the financial burden placed on your company.
