Ministry: Service charge at businesses with CAs to stay, regulations being drawn up

Datuk Seri Alias Ahmad. - Bernama

PUTRAJAYA: The Government has decided not to ban the controversial service charge that is imposed at hotels and restaurants, following a meeting with stakeholders, said Datuk Seri Alias Ahmad.

The Domestic Trade, Cooperatives and Consumerism Ministry secretary-general said the decision to maintain the long-standing business practice was unanimously agreed by the associations, unions and consumer groups that were represented at the meeting.

However, the ruling made by the Ministry this month that only businesses with collective agreements (CA) can collect the service charge however remains, said Alias.

A study will also be conducted to see the viability of establishing laws regulating the implementation of the service charge.

"The meeting took note of several points presented by the groups, among them the low wages earned by workers in the industry.

"There are still some hotel workers who are paid a low basic salary of RM350 a month, even after the implementation of the national minimum wage.

"If the service charge is removed, the low basic salary makes the hotel and restaurant industry unattractive. This also allows foreign workers to take up the jobs of the locals," said Alias at a press conference held at the Ministry building here.

Alias said the meeting had also decided that all businesses imposing service charge are required to display a sign to that effect.

"The Ministry is preparing a standard guideline for businesses imposing the service charge," he said, adding it was being drawn up with the help of the Attorney-General's Chambers.

"We hope to complete this soon so we can take follow-up action on businesses who do not adhere to the guidelines," said Alias.