Partner Article

Businesses back big tip to restaurants

Last week’s government announcement that restaurants and bars will no longer be able to pay below the minimum wage and make up the difference using employee’s tips has been warmly welcomed by small businesses in the North East.

An overwhelming majority of members of the Federation of Small Businesses (FSB) (99 per cent) do not use tips to subsidise wages and a significant number (85 per cent) said they are in favour of legislation changing.

Members believe it will have a positive impact on their business and are keen to create a level playing field between small businesses who pay a fair hourly rate, and big companies who use tips to avoid paying wages.

Colin Stratton, FSB Regional Chairman for the North East of England, said: “SMEs are known for their fair and decent treatment of employees, something which our case study clearly highlights. Small restaurants want to do the best by their staff and pay them a decent hourly rate with tips added as an extra.

“Big businesses have been using this loophole to keep costs down for too long. This is abusing the customers’ trust when giving tips in good faith. It creates an unfair playing field and means small companies, who pay their staff a decent hourly rate and let them keep tips on top, simply cannot compete.

“Such a piece of legislation can only bring the gap between big businesses and SMEs closer together but what is more our case study clearly shows the contribution that small businesses bring to the business world.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .