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The usual practice is that only 85 percent of tips and service charge goes to the employees and the remaining 15 percent is collected by the company. In a proposed bill, the proponent seek to give 100 percent of collected tips to service sector employees.
Senate Bill No. 1299, or "An Act Providing that 100% of the Service Charge Collected in Hotels and Other Establishments Be Distributed to All Covered Employees and for Other Purposes" was introduced by Senator Joel Villanueva.
Villanueva is the chairperson of the Senate committee on labor, employment and human resources development.
The bill said rank-and-file employees of the service sector receive only 85 percent of the service charge paid by customer in hotels, restaurants, and similar establishments.
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Under Section 14 of Presidential Decree 850 signed in December 1975, the collection of service charge was optional, but any amount collected shall be distributed 85 percent and 15 percent in favor of employees.
Villanueva said the bill does not make the collection of service charge mandatory, but should establishments collect it, its total must be given to workers.
Senator Grace Poe, a co-sponsor of the bill, said these employees are often under short-term contracts.
She added giving employees 100%of service charges would not only help augment their income, but also "act as an incentive for them to do better."
The push for the bill followed after the Senate approved the tax reform bill which will increase the number of lower-income Filipinos exempted from paying income tax.
Source: CNN Philippines
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