The Argentinian steak restaurant chain Gaucho is set to reduce the portion of service charge allocated to its waitstaff, redistributing some of the funds to increase compensation for office employees. Starting October 1, existing waiters will receive between 25.45% and 29.4% of the service charges collected, depending on their length of service, which marks a decrease from the previous 37%. Bar staff will now receive 17%, reduced from 20%. New hires will only earn 17% of the service charge, and current employees have expressed concerns that all waiters may eventually be placed on this lower tier.
According to the company’s troncmaster, WMT Troncmaster, part of the service charges will now be shared with non-public staff, which could include employees at the head office and those provided by agencies. The troncmaster explained that the idea is to ensure all team members who contribute to the customer experience are included in the distribution of service charge funds. However, employees have voiced concerns about the fairness and transparency of this new distribution model, including potential implications for their overall earnings.
Gaucho has stated that these changes were informed by industry benchmarking and are compliant with legal requirements, which mandate that employers in Britain distribute 100% of collected service charges to staff in a fair manner. For context, this regulation was introduced due to concerns that service charges were being used to artificially enhance employee compensation in a way that could reduce national insurance liabilities.
Employees have indicated they were not consulted about the changes and worry about their financial future as service charge reductions could lead to significant monthly income losses. Some staff have reported fears about the sustainability of their roles and the adequacy of their earnings in light of these adjustments.
Source: https://www.theguardian.com/business/2025/oct/17/gaucho-restaurant-chain-to-slash-share-of-service-charge-for-waiting-staff