McDonald’s is criticizing the restaurant industry for allowing tipped wages, which let managers pay servers less than the minimum wage as long as customer tips make up the difference
ByDEE-ANN DURBIN AP business writer
September 5, 2025, 4: 35 PM
McDonald’s is criticizing the restaurant industry for allowing tipped wages, which let managers pay servers less than the minimum wage as long as customer tips make up the difference.
McDonald’s Chairman and CEO Chris Kempczinski said in an interview on CNBC Tuesday that he supports President Donald Trump’s efforts to eliminate federal taxes on tips. But since McDonald’s workers don’t earn tips, the policy doesn’t help them.
Kempczinski also noted that in many states, sit-down restaurants are allowed to pay servers as little as $2.13 per hour, a federal minimum set in 1991, with tips making up the rest of their pay.
“So right now, there’s an uneven playing field. 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,” Kempczinski said.
Seven states – including California, Nevada and Minnesota – require restaurants to pay their servers a minimum wage before tips are added. Kempczinski said that policy helps lower poverty levels and employee turnov