SERVICE CHARGES

Question 1

Definition of Service Charges

amount collected by hotels and restaurants that is added to the bills for work or services rendered

Question 2

Coverage:

all employees, except managerial employees under direct employ of the establishment

Question 3

Distribution of Service Charges

-all service charges shall be distributed completely and equally, based on actual hours or days of service rendered among the covered employees

-includes those already receiving the benefit of sharing in the service charges

Answer 3

Explanation:

It means the amount of service charge each employee gets depends on how much time they actually worked.

For example:
- If an employee works more hours or days than others, they will get a bigger share of the service charge.
- If an employee works fewer hours or days, their share will be smaller.

The distribution is fair and proportional to the work done by each employee.

Question 4

Frequency of Distribution

-once every two weeks or twice a month
•intervals not exceeding 16 days

Question 5

Increase in Minimum Wage

in case of wage increase, service charges paid to employees shall NOT be considered in determining compliance with increased minimum wage

Answer 5

Explanation:

If there is a wage increase, the employer cannot count the service charges as part of the employee’s increased minimum wage.

For example:
- If the new minimum wage is ₱600 per day, the employer must pay ₱600 as the base wage, excluding any service charge earnings.
- Service charges are considered an additional benefit and cannot be used to offset the required wage increase.