McDonald’s employees will not only get no benefits from President Donald Trump’s no-tax-on-tips efforts, but the policy also exposes inequities between businesses that decide to pay workers the federal minimum wage versus those who pay employees a smaller wage supplemented by tips, according to CEO Chris Kempczinski.
“The issue with no tax on tips is it only benefited those restaurants that have tips,” Kempczinski said. “We don’t do tipping in McDonald’s, and so we don’t get the benefit of, essentially, that tax relief there.”
“It is a win for the business owner,” Dennis said. “They may have more of their employees wanting to work the jobs that earn tips, and it may also help to get more people in these service-oriented jobs.”
Kempczinski said the policy therefore gives an additional edge to companies with tipped wages policies, which McDonald’s does not have.
“Right now, there’s an uneven playing field,” he said. “If you are a restaurant that allows tips or has tips as part of your equation, you’re essentially getting the customer to pay for your labor, and you’re getting an extra benefit from no taxes on tips.”
“There’s already been a model that shows that the tipped wages can be at the same as the federal minimum wage,” Kempczinski said. “We just need to do that, I think, across all 50 states.”
