The BIG Question: Are Contracted Service Charges Going to the Banquet Staff?

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Corporate meeting planners, wedding planners, contracted third-party planner “suppliers,” and other planners alike all have varying ideas and thoughts as to whether that service charge (++) is really going to the serving banquet staff or if it’s going straight to the facility hosting the event.
 
The true answer lies somewhere in the middle: depending on the facility, the banquet staff is either being tipped from that service charge (++), or the service charge is going directly to the facility’s bottom line. So, what difference would that make when it comes to adding in extra gratuity when planning an event? A ton!  
 
On one hand, if you have a facility that only takes a small cut of that service charge (++)—let’s say 1-2% off the top of a typical service charge of around 24%-- and the rest goes to the banquet staff (everyone from banquet setup, banquet bussers, banquet servers, banquet captains, bartenders, and even banquet managers), your staff might make $3 or $4-something an hour base pay, but if you divide that $50 per plate + service charge among all banquet staff, they could end up making anywhere from $14-$25 or more an hour, depending on the hours worked and the number of staff involved. That is a VERY happy staff! Additional gratuity is usually not needed at these events, and you will often notice that staff is more attentive, more eager to do little “extras” (get dressings not ordered by the client, refill your drink 6-7 times, get a “to-go” box—which is frowned upon, etc.) You will also generally see more long-term staff, more trained staff, and smaller turnaround.
 
On the other hand, if you have a facility that takes the entire service charge (++) and does not give any of it to the banquet staff, you will see different results. Your staff will make a higher flat rate (maybe between $8-$11 per hour, but they will receive no additional gratuities on top. They are generally not motivated to go above and beyond their typical job duties: setting up the function as requested, serving the meals (usually as fast as possible), and when everyone is gone, tearing down the banquet as quickly as possible. Many of the banquet servers who work for these facilities often work at two or more properties to supplement income, and are quite reluctant to go above and beyond for guests, client contacts, or even the event planner. You will also notice that the staff average is often newer, less experienced and less trained, and the turnaround is incredibly high. Because more staff wants to work at a gratuity (service charge) facility, the non-gratuity facilities have a hard time hiring on a large staff and usually supplement with temp agencies, which also leads to the same issues: less experience, less training, and more turnaround. You may even notice that the functions do not go as smoothly as they should.
 
Your best bet as an event planner or event contractor is to ask when considering signing the contract if the facility keeps the service charge (++) or if it (even a portion of it) goes to the banquet staff working the function. A reputable hotel will be able to tell you the honest truth, and from there, you will be able to inform your client if a) you wish to work with this facility or b) if the client has money in the budget for additional gratuity. After all, the staff working your event can make your event a complete success…or a total failure.
 
Jennifer Tangney has worked as an event planner in Saint Louis, MO for about a decade. Only recently has she experienced the Food and Beverage management operations side of things, gaining the back of the house knowledge regarding banquet setup, space planning, and proper banquet execution insight. She is new to the SPIN network, and has a deep passion for all things event-related.
 
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