Press Release

Small businesses back restaurant tipping legislation

Thursday, July 31 2008

The Federation of Small Businesses (FSB) warmly welcomes the Government's 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. 

An overwhelming majority of members (99 %) do not use tips to subsidise wages and a significant number (85 %) 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. 

John Wright, FSB National Chairman, said,"Small restaurants want to do the best by their staff. They pay their staff a decent hourly rate. Tips are then an added extra. 

"Big businesses have been using this loophole to keep costs down. This is abusing customer’s trust who give 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.

"The National Minimum Wage is there to create an equilibrium between employers. We support this. Big restaurants are abusing this and relying on customer’s generosity to contribute to otherwise low wages."