FSB: Small businesses back restaurant tipping legislation

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 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.

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.”

ENDS

Notes to Editors

1. The FSB undertook a snap poll this week among its members in the restaurant trade.

2. The FSB is Britain’s biggest business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk.

Contacts:

Stephen Alambritis: 020 7592 8112 / 07788 422155
Prue Watson: 020 7593 8121 / 07825 125 695
Marc Shoffman: 020 7592 8113 / 07595 067068

For regional FSB contacts please go to www.fsb.org.uk/regions