Service Charges

April 23, 1976POLICY INSTRUCTIONS NO. 13-76TO:All Regional Directors   SUBJECT:Service Charges Under PD 850, the law on the sharing of service charges in hotels and restaurants has been altered. Before PD 850, service charges were to be distributed at the rate of 75% for rank-and-file employees on a pro-rata basis. The balance of 25% was to be retained by management to answer for breakages and losses, after deducting the share of managerial employees.Under PD 850, 85% of the service charges shall be distributed equally among all employees receiving not more than P2000, while 15% shall be retailed by management to answer for losses and breakages but management may pay out of its 15% the share of those receiving more than P2000 a month. The employers are allowed to phase out service charges collection by only after integrating the share of the employees into their basic salary.The advantages of the new provisions on service charges are: 1) highly paid employees (those receiving more than P2000) are excluded from the benefit, this giving more share to rank-and-file workers;...