New UK Tipping Policy Should Help Small Businesses

At a bar I used to frequent, one employee always made a point of getting drinks to my group quickly.  We’d tip well in return, and enjoyed interacting with him.  It would have been nice to hear he’d retired in grand fashion, though, and a new development in the UK should help waiters and small businesses alike.

Restaurants and bars will, in short, not be able to use tips as an excuse to pay less than the minimum wage.  John Wright, National Chairman of the Federation of Small Businesses, stated, "Big businesses have been using this loophole to keep costs down. . . .  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."

Any small businesses that used the loophole will lose a financial advantage, too, of course.  And small businesses that didn’t use the loophole will lose an edge when it comes to attracting and retaining good employees.

On the whole, however, the changes look like something small business owners are firmly behind.  The FSB found that a full 99 percent of its members don’t subsidize wages and 85 percent want to change tipping policies.

Let’s just hope the waiters keep us in mind if they wind up with an extra Aston Martin or two.