The Federation of Small Businesses (FSB) has backed the Government's plans to make it illegal for restaurants to top up minimum wage with tips.
The FSB said the overwhelming majority (99%) of its 2,000 restaurant members do not use tips to subsidise wages while 85% said they are in favour of legislation changing.
The group said its members believe the law change will help "create a level playing field between small businesses who pay a fair hourly rate, and larger companies who use tips to avoid paying wages".
John Wright, FSB national chairman, added: "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 customers, 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."
By Daniel Thomas
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