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Only Hotels and Restaurants with Collective Agreements Can Impose Service Charge

Only Hotels and Restaurants with Collective Agreements Can Impose Service Charge

Effective Monday, 6 April, restaurants and hotels are only allowed to impose a service charge on customers if they have a collective agreement between employers and employees.

According to the Ministry of Domestic Trade, Cooperative and Consumerism (KPDNKK) secretary general, Datuk Seri Alias Ahmad, restaurants and hotels must clearly display a notice if they want to impose service charges. They must explain the reason for imposing a service charge to the customer. This, according to Bernama, is because the service charge is an international practice, is beyond any control, and is bound between the customer and service provider.

This new instruction is temporary until the Government figures out a way to regulate the collection of service charges.

Businesses with no collective agreement between employer and employee but still continue to impose it will be subject to action under the Anti-Profiteering Act. Customers who come across businesses breaching this new directive should make a report to the KPDNKK.

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Source: Bernama

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