Only restaurants, hotels with collective agreements allowed to impose service charge

Datuk Seri Alias Ahmad

PUTRAJAYA: Effective Monday, restaurants and hotels will not be allowed to impose service charge unless they have employer-employee collective agreements in place.

Domestic Trade and Consumerism secretary-general Datuk Seri Alias Ahmad said the instruction is temporary, until the Government figures out a way to regulate the collection of service charges.

"At present, there is no official body or ruling that regulates the collection of service charge. It is an age-old international practice. However, as we have received many complaints from consumers, we came to this decision," said Alias at a press conference, Monday.

He added that businesses must install clear displays if service charges are being imposed.

"It is important for consumers to know what sort of service they are getting if these places are charging for service," he said.

Businesses that do not have a collective agreement on service charges but still continue to impose it will be subject to action under the Anti-Profiteering Act.