According to the report, the ministry’s secretary general Alias Ahmad said the new rules would enable the ministry to check if businesses were entitled to impose the service charge and if employers were distributing the service charge to their workers.

At present, only outlets with a collective agreement (CA) are allowed to impose a 10 per cent service charge on their bills and according to the ministry, only 93 companies in the hotel and food and beverage industries were eligible to do so.

Alias said business owners are required to display the service charge notice to inform their customers if they were eligible to impose service charges or not.

“However, not only those who qualify are doing that, all businesses do that these days,” he said, adding a lack of specific rules to enforce the ruling saw businesses displaying the notice and imposing service charges.

Alias explained the new rules involved an amendment to the Consumer Protection Act and if all went according to plan, would come into effect early next year.

“If employers or companies fail to do so, the ministry can take stern action based on the laws,” he said, stating however no discussions had been held yet on the penalties for offenders.

The issue of the imposition of service charges came to light last year following the implementation of the Goods and Services Tax (GST).

The ministry had then already clarified that only outlets with CAs could impose the service charge.

The 10 per cent service charge, which is in lieu of tips, is supposed to go to the workers, but some workers claim they are being short-changed by their employers.