Datuk Seri Alias Ahmad (left) says the service charge was introduced to replace the tipping system, to compensate for low salary of workers as some hotels still pay their workers as low as RM130 a month. ― File pic
PUTRAJAYA, April 22 ― Putrajaya announced today that businesses can continue collecting the service charge from customers after meeting with stakeholders here on the matter, noting that abolishing the fee could negatively impact the service industry.
In a press conference at the Domestic Trade, Cooperative and Consumerism Ministry, secretary-general Datuk Seri Alias Ahmad said all parties from eight government agencies and 14 non-government organisations reached a unanimous decision at today’s meeting.
“The service charge was introduced to replace the tipping system, to compensate for low salary of workers as some hotels still pay their workers as low as RM350 a month.
“This (abolishing the charge) will make the hotel sector unattractive to local job seekers,” Alias said in one of the reasons cited for maintaining the fee.
“Based on the reasons above, the government maintains that businesses can continue to collect service charge.”
He added, however, that businesses that impose the fee on customers must have their Collective Agreements (CA) put up on display at their premises.
When asked if all parties at the meeting agreed to the decision, he briefly answered; “All.”
A meeting was conducted on Monday with non-governmental organisations (NGO) and various industries on the implementation of service charge.
One of the suggestions from stakeholders was to abolish the charge and restructure the payment scheme for employees.
Earlier this month, Putrajaya had said it will only allow the service charge to be imposed on customers by establishments that have CAs, following the public outcry over the continued existence of the charge post-GST implementation.
The service charge is on top of the 6 per cent GST that replaced the sales tax, which also stood at 6 per cent.
Alias added that they are still discussing with the Attorney-General Chamber on the directive for premises to display the notice.
“We hope to come out with the guidelines as soon as possible. At the moment, we would only advise premises that charge service without displaying notice,” he added.
* A previous version of the story erroneously quoted Datuk Seri Alias Ahmad as saying hotel workers were paid as little as RM130 a month. The quote has since been corrected.