BCBusiness

September 2014 The Small Business Issue

With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.

Issue link: http://digital.canadawide.com/i/364562

Contents of this Issue

Navigation

Page 54 of 83

bcbuSineSS.ca September 2014 BCBusiness 55 says McAdams from his home base in Guelph, Ontario. "If I'm going to spend $100 and I know I'm going to tip 15 per cent, then I'm willing to spend $115 on this product. We can't find any other instances of industries where the consumer is allowed to deter- mine where such a high percentage of revenue goes." And there are even bigger financial liabilities that a restaurant assumes when they choose to "tip-out" (or share) the waiters' collected tips to the back of house as a means of making wages more equitable. "As soon as the restau- rant takes any ownership of that money, it's called a controlled tip," McAdams explains. "They are legislated by the CRA to hold taxes on that money. If they're audited, they're responsible for that tax money. We found only a third of operators are doing that—and that's a huge risk." Restaurants Canada, with 4,000 members in B.C., still argues in support of the current model. "I don't think you're going to be changing tipping culture," says Mark von Schellwitz, the association's Vancouver-based vice- president for Western Canada. "There are some very good reasons why it exists. Tipping encourages profession- alism; it encourages wine and food and service knowledge. And many of our employees in the industry make a very good living. They're motivated to take care of customers through gratuities." David Jones, meanwhile, argues that other service industries don't seem INCENTIVES Restaurants Canada vice-president Mark von Schellwitz says tipping leads to better service.

Articles in this issue

Links on this page

Archives of this issue

view archives of BCBusiness - September 2014 The Small Business Issue