Restaurant chains cut staff perks to meet National Living Wage

By Sophie Witts contact

- Last updated on GMT

Restaurant chains cut staff perks to meet National Living Wage

Related tags: National living wage, Minimum wage

Restaurant chains including Zizzi, EAT and Café Nero have faced criticism for appearing to cut staff perks following the introduction of the National Living Wage (NLW).

From 1 April all businesses have had to pay staff over the age of 25 at least £7.20 per hour, a 50p rise on the previous minimum rate.

But while restaurants such as Costa and All Bar One are planning to raise menu prices to meet the cost,​ other businesses are instead cutting staff perks such as free lunch and paid breaks.

Cafe Nero

Café Nero has extended the NLW to all workers, instead of just staff over the age of 25.

But the group has told employees that they will no longer be entitled to a free £4 panini for lunch, and will instead have to buy discounted meals.

The chain said that the NLW was a ‘huge potential cost to the business’ but also an opportunity to ‘review pay and reward employees’ for their work.

EAT

Sandwich chain EAT is no longer paying staff for their 30 minute lunch break, which is estimated to save the chain £3.60 per employee each shift.

However, the chain insisted that its average hourly rate was now £7.60 per hour and all employees were offered a free lunch and ‘as much free tea and coffee as they want’.

Zizzi

Zizzi has cut the proportion of tips shared out to waiting staff by 20 per cent and reduced the choice of free food available to a margherita pizza or pasta and tomato sauce.

Waiting staff now receive 50 per cent of tips left on credit card or through the 12.5 per cent service charge, with the remaining half shared between kitchen staff and supervisors.

The split was previously 70/30 in favour of front-of-house workers.

However, a spokesperson said that the changes were unrelated to the NLW.

“Zizzi has supported the introduction of the NLW from the outset, underpinned by its belief that its employees are an essential part of its business who should be rewarded fairly,” a spokesperson told The Guardian.

“A subsidised staff food menu with dishes at £1 or £2 is now available to all regardless of the length of their shift. We still provide free teas, coffee and squash to all.”

Impact

Dave Turnbull, national officer at the Unite Union, said he was disappointed that the NLW had brought little change.

“This is clearly the same old pattern of a major high street restaurant chain failing to pay its staff a wage they can actually live on and taking it for granted that their customers will mitigate the impact of low wages through leaving tips," he told the Financial Times.

Last week George Osborne criticised companies removing staff perks as not acting ‘in the spirit of the law’.

The Chancellor is aiming to raise the NLW to £9 per hour by 2020.

PwC estimates that the rise will cost the hospitality sector £13.2m over the next four years.

Related topics: Business, People, Restaurants

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