McDonald's workers won't see a benefit from the 'no tax on tips' portion of the 'Big Beautiful Bill'

Name: McDonald's workers won't see a benefit from the 'no tax on tips' portion of the 'Big Beautiful Bill'
Uploaded: 2025-09-09T01:18:39+00:00
Duration: 1 min 23 s
Channel: Business Insider
Description: McDonald’s workers won’t benefit from the “no tax on tips” provision in the Big Beautiful Bill. However, the new law highlights an “uneven playing field” in the restaurant industry, according to CEO Chris Kempczinski. He noted that, with tipped wages, some restaurants are effectively shifting the responsibility of paying their workers onto the customers.

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Business Insider

1 year ago

McDonald’s workers won’t benefit from the “no tax on tips” provision in the Big Beautiful Bill. However, the new law highlights an “uneven playing field” in the restaurant industry, according to CEO Chris Kempczinski. He noted that, with tipped wages, some restaurants are effectively shifting the responsibility of paying their workers onto the customers.

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00:00Donald Trump's Big Beautiful Bill gave some restaurant workers a break by not taxing their tips.

00:05One of the world's biggest restaurant chains, though, says there's a problem with that approach.

00:09In an interview last week, McDonald's CEO Chris Kempchinski said that McDonald's won't see any benefit from the no-tax-on-tips provision of the Big Beautiful Bill.

00:17That's because McDonald's pays its workers a minimum wage. That can be as low as $7.25 an hour, based on the federal minimum wage.

00:24But other restaurants, especially ones that have table service, don't need to pay nearly as much to their workers.

00:30That's because some restaurants use what's called a tipped wage, meaning they can use some of the tips that customers pay to contribute toward the minimum wage that they pay their servers.

00:39That can mean, for example, that some restaurants pay as little as just over $2 an hour to servers.

00:44Kempchinski said that that's a big advantage for those restaurants.

00:47Instead of paying federal minimum wage, they're able to save money on worker wages.

00:52And effectively, customers are picking up the bill with their tips.

00:55While he didn't mention any specific laws or bills before Congress, Kempchinski said that all restaurants should pay the same minimum wage to level the playing field.

01:03Kempchinski's comments have exposed a rift between McDonald's and the broader restaurant industry.

01:08In a statement after he made his remarks, the National Restaurant Association said that McDonald's is no longer a member.

01:13The association is a trade group representing the restaurant industry based in Washington, D.C.

01:22To be continued..

01:25...