Gratuity deductions withdrawn
De Duine drops gratuity deductions after backlash
A total of N$13 900 in previously withheld tips will be returned to affected staff members.
De Duine Hotel in Henties Bay has officially informed the labour ministry that it will abandon its controversial gratuity deduction policy, following an investigation and public uproar.
In a leaked letter addressed to a labour inspector after a site inspection, the hotel confirmed it would no longer implement the deductions and promised to reimburse all withheld tips by Friday, 4 April. The letter, signed by owner Nico van der Westhuizen, outlined corrective steps agreed upon during the ministry’s visit.
“We will not continue with the deductions as indicated,” the letter reads. “We already decided that the method be discarded when somehow it leaked out to the media.”
The proposed policy, shared in a discussion document that went viral, aimed to log tips as loans and deduct part of them from waiters’ salaries. The idea was met with harsh criticism and accusations of unfair labour practices.
Despite walking back the plan, the hotel maintains its intentions were aligned with tax compliance goals.
Compliance
“De Duine Hotel remains committed to both employee welfare and compliance with the labour and tax laws,” the hotel stated. “We will continue to evaluate solutions, in consultation with labour consultants, your office and the Ministry of Finance, to ensure that our approach is fair, legal and sustainable.”
The hotel also said it is seeking further clarity from the Namibia Revenue Agency (NamRA) and the courts on how electronic gratuities should be taxed.
Van der Westhuizen confirmed that labour inspectors visited and had no immediate objections: “They were perfectly happy with how everything is being done.”
Labour ministry executive director Lydia Indombo said a report would be issued after the team concludes its findings. “I cannot comment further than that – let’s see what our team delivers,” she said.
De Duine also pledged to return the full N$13 900 in previously withheld gratuities to staff and implement new employment contracts drafted with help from a labour consultant. Furthermore, the hotel committed to improving payslip transparency and meeting minimum wage laws.
Tips taxable
While NamRA has not yet issued specific guidance on gratuities, experts note that under Namibia’s Income Tax Act, all income – including tips – is taxable.
Some restaurant owners voiced support for De Duine’s intent but criticised its poor communication.
“They were 100% correct in their intent,” said a coastal restaurant owner. “It’s just unfortunate that the draft letter leaked and was misconstrued as an attempt to take ownership of the waiters’ money.”
Others pointed out that tips are often pooled among all staff: “Good service is a team effort,” one said.
Credit and debit card tips also pose challenges, as banks deduct service fees. “It’s actually the restaurant that loses money,” another added.
“They’re trying to do the right thing,” a restaurateur concluded. “It just needs to be structured and worded properly.”
In a leaked letter addressed to a labour inspector after a site inspection, the hotel confirmed it would no longer implement the deductions and promised to reimburse all withheld tips by Friday, 4 April. The letter, signed by owner Nico van der Westhuizen, outlined corrective steps agreed upon during the ministry’s visit.
“We will not continue with the deductions as indicated,” the letter reads. “We already decided that the method be discarded when somehow it leaked out to the media.”
The proposed policy, shared in a discussion document that went viral, aimed to log tips as loans and deduct part of them from waiters’ salaries. The idea was met with harsh criticism and accusations of unfair labour practices.
Despite walking back the plan, the hotel maintains its intentions were aligned with tax compliance goals.
Compliance
“De Duine Hotel remains committed to both employee welfare and compliance with the labour and tax laws,” the hotel stated. “We will continue to evaluate solutions, in consultation with labour consultants, your office and the Ministry of Finance, to ensure that our approach is fair, legal and sustainable.”
The hotel also said it is seeking further clarity from the Namibia Revenue Agency (NamRA) and the courts on how electronic gratuities should be taxed.
Van der Westhuizen confirmed that labour inspectors visited and had no immediate objections: “They were perfectly happy with how everything is being done.”
Labour ministry executive director Lydia Indombo said a report would be issued after the team concludes its findings. “I cannot comment further than that – let’s see what our team delivers,” she said.
De Duine also pledged to return the full N$13 900 in previously withheld gratuities to staff and implement new employment contracts drafted with help from a labour consultant. Furthermore, the hotel committed to improving payslip transparency and meeting minimum wage laws.
Tips taxable
While NamRA has not yet issued specific guidance on gratuities, experts note that under Namibia’s Income Tax Act, all income – including tips – is taxable.
Some restaurant owners voiced support for De Duine’s intent but criticised its poor communication.
“They were 100% correct in their intent,” said a coastal restaurant owner. “It’s just unfortunate that the draft letter leaked and was misconstrued as an attempt to take ownership of the waiters’ money.”
Others pointed out that tips are often pooled among all staff: “Good service is a team effort,” one said.
Credit and debit card tips also pose challenges, as banks deduct service fees. “It’s actually the restaurant that loses money,” another added.
“They’re trying to do the right thing,” a restaurateur concluded. “It just needs to be structured and worded properly.”
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