Whistleblowers at the Hilton Carlton have claimed senior managers have been pocketing more than their fair share of tips over the last three years.
The employees, who wish to remain anonymous for fear of reprisals, were shocked to discover four of the top managers at the North Bridge hotel have been receiving a chunk of gratuities left by customers.
Tips made on credit and debit cards, as well as added to hotel room bills, are pooled and divvied up between staff each month.
But workers at the hotel were unaware that the extra cash was also going to managers.
The shock revelation has sent morale plummeting after a document detailing the breakdown of tips to all staff was leaked.
It shows that each month between 20 and 30 per cent of the overall gratuity total is paid directly to four members of the senior management team.
The remainder of the tips are then split between staff members depending on the number of hours worked.
One month, of the £6578 total, each manager received £328.90.
The source said: “They are on higher salary than us by a long shot.
“We don’t deserve this – it makes us really angry.
“It’s like something you’d hear about from decades ago but it’s amazing in this day and age people think they’re allowed to do that and are getting away with it.
“What’s worse is when you hear these managers are buying new houses and we’re now thinking to ourselves ‘they’re probably paying for their mortgage with our tips’, while we’re struggling to just pay rent – people who have student loans and overdrafts and who are earning £7.80 an hour.
“Customers think they are giving tips to top up or help the service staff on low wages but the money is going straight to the top management.
“Quite frankly it makes me very sick that this can be accepted in any modern workplace especially a brand that carries such prestige such as Hilton.”
Hotel investment and management company Amaris Hospitality owns The Hilton Carlton.
A spokesman from Amaris Hospitality said: “The Hilton Carlton Edinburgh current policy is paying 100 per cent of tips out to our people, of which 93 per cent goes to employees in service facing roles and 7 per cent to operational management.
“The distribution of tips from credit cards and room bills is distributed to employees based on hours worked in any given month.
“We’re in the process of reviewing the current practice and envisage making some changes to our current tipping policy in the near future.”
Amid plans to legally bar hospitality outlets from hoarding tips UKHospitality, the trade body representing the sector, said a code of practice which promotes the fair distribution of tips among staff was sufficient and legislation was an unnecessary step.
UKHospitality chief executive Kate Nicholls said best practice had been widely promoted across the sector.