Latest news with #serviceworkers
Telegraph
3 days ago
- Business
- Telegraph
Trump is about to send tipping culture into overdrive
'When I get to office we are not going to charge taxes on tips, on people making tips,' Donald Trump promised on the campaign trail. 'If you're a restaurant worker, a server, a valet, a bell hop, a bartender, one of my caddies –your tips will be 100pc yours.' The billionaire president has stayed true to his promise. The bulk of the tax cuts outlined in Trump's 'big, beautiful' tax and spending bill, currently before the Senate, reward the wealthy. But one populist clause within the legislation is a plan to scrap federal tax on tips – one of Trump's key campaign pledges. The tax break is popular with US service workers – everyone from hairdressers to restaurant staff – but may not be so popular with customers. American tipping culture is already in overdrive, and people hate it. A policy that was once the sole domain of the restaurant and hospitality sector has rapidly proliferated since the pandemic. Takeaway coffee orders now prompt demands for a few bucks extra and even stopping by a news-stand for a paper or some gum can lead people to pay an extra 20pc on their bills. Many Americans have noticed this creep and don't like it. As one Reddit user put it online: 'What the f--- am I tipping for? Is it not bad enough that I just paid over $5 (£3.7) for a small bottle of water?' Trump's tax break is likely to push a wave of new jobs to adopt restaurant-style tipping policies and will incentivise businesses to restructure their employees' pay, so that they receive a larger proportion of their income from tips. Maurice Obstfeld, former chief economist at the International Monetary Fund, says: 'Number one, this is going to induce new employers to classify more compensation as tips.' It may already be happening. Chris Bakke, a San Francisco entrepreneur and investor, wrote on X recently: The message, which may have been a joke, was in response to news that the US Senate had passed the No Tax on Tips act – a bipartisan bill proposing a tax deduction of up to $25,000 for cash tips. It is separate to the president's proposals, showing the broad support for the policy across the political spectrum. My barber just offered me a $1 haircut if I tipped him $50. — Chris Bakke (@ChrisJBakke) May 20, 2025 $15bn bill Both Republicans and Democrats present the policy as a boost for blue-collar workers. However, economists warn that people could end up with lower baseline pay as a result of the changes, putting more pressure on customers to top up earnings. That means even more social pressure and financial pain at the checkout. The plans laid out in Trump's tax and spending bill offer the same level of tax break as the No Tax on Tips act. Under the current law, staff are required to report tips to their employer if they total $20 or more in a single month. Businesses then include the tips in salary calculations – withholding federal income tax, social security tax and Medicare taxes. The new exemption will only apply to tips paid in cash, not by card. Workers must earn less than $160,000 per year to qualify and be working in occupations that 'customarily' receive tips. The US Treasury will publish a list of these occupations when the bill is passed into law. The total cost to the public purse will be around $15bn per year. The impact on American consumers and tourists visiting the US will also be huge. Abir Mandal, senior policy analyst at the Tax Foundation, says tax exemptions on tips will create 'perverse incentives' for employers. It will encourage businesses to make employees source more of their wages from tips, with a lower proportion from their salaries. Expectations for tips could also become far more widespread, and bigger. Chris Edwards, a tax expert at the Cato Institute, a libertarian think tank, says: 'I think different job types will shift their types of compensation. You can think of all kinds of professions where it could become more normal.' Luggage handlers at airports are an obvious potential example, says Mandal. 'They are given a salary. You can give them like $1 or $2 for carrying a bag, but in general they are paid a wage. If this thing takes off, perhaps their income could be reconfigured so that they would make a lower wage but expect a larger tip per bag.' Covid tipping point Tipping has always been the norm in US restaurants, but something changed during the pandemic. More people had food deliveries and wanted to show their appreciation for drivers, widening the tipping net. At the same time, wage growth accelerated sharply as the economy reopened but restaurant bosses and other small business owners struggled to match it. As a result, demands for tips grew. 'The expectation of tipping has grown quite dramatically,' says Stephen Barth, an attorney and hospitality law professor at the University of Houston. 'It was already growing and then during Covid it expanded exponentially.' The share of bakeries asking for tips has soared from 36pc to 49pc in the five years to July 2024, for example, according to analysis of payroll data by Gusto. Among coffee shops, the proportion has jumped from 56pc to 72pc. 'For a lot of small businesses, they run on very tight margins, which means that owners couldn't always raise wages. Tips let them pay more to their employees without hitting their budgets,' says Nich Tremper, senior economist at Gusto. The growth of electronic payment terminals, such as Square, has also made it easier to request tips. Whereas with cash it was up to a customer's discretion, now they are confronted with a menu of tip options and have to actively opt out. Even some card machines now have this as the default option. Tips are even now entering shops. The share of retail businesses using tips as part of their employees' pay nearly doubled in the five years to July 2024, rising from 3.86pc to 6.6pc. One in six health stores, 16.2pc, now pay their staff partly in tips. If Trump's bill passes, tipping will become even more important to staff wages, but potentially also more irritating to give. 'Only cash tips will be untaxed if this legislation passes. There may be added pressure on consumers to pay tips in cash. It'll make things awkward. And people already hate tips in America,' says Mandal. The change to federal tax policy is likely to trigger a wave of similar policies at a state level, he adds. States typically try to conform their own taxable income in line with federal policy. That may sound good for workers. But Barth says it amounts to just a 'subsidy for employers'. The tax break will reduce pressure on employers to raise wages and companies could actually cut workers' base pay as a result, demanding they make up the difference through tips. It hits at the heart of what many customers dislike about the recent transformation in tips. What was once a way of showing appreciation for good services has transformed into an expectation with no real link to the quality of experience. If you don't tip, it's not a sign that you're unhappy with the service – it's a signal you're a bad person. Obstfeld is scathing: 'This was a campaign promise that was made to essentially pander to voters and the economic rationale for it is basically nil.' The public may soon share his anger as demands for tips mount up.
South China Morning Post
7 days ago
- South China Morning Post
Man in Japan arrested for forcing store clerk to shave head in apology
A man in Kyoto has been arrested for allegedly forcing an electronics store employee into shaving his head in a dramatic act of apology – an incident that has cast fresh light on Japan 's deep-rooted customer-is-always-right culture and the country's recent move to curb abuse against service workers. Police detained the 49-year-old suspect on suspicion of coercion on Thursday for an incident which happened just days after a new ordinance banning customer harassment came into effect in Tokyo. The rule is Japan's first legal effort to address kasuhara – a term used to describe unreasonable or aggressive behaviour by customers – and was prompted by mounting reports of mistreatment across the service sector. Though it carries no criminal penalties, it aims to serve as a deterrent by formally prohibiting verbal abuse and excessive demands against employees, according to The Asahi Shimbun. The head-shaving case underscores the sort of incidents the rule is meant to tackle. On April 4, three days after the ordinance in Tokyo took effect, the suspect reportedly called a store in Kyoto's Minami ward to complain about a faulty set of electric hair clippers. He demanded a replacement, which a 42-year-old clerk agreed to deliver personally.
Yahoo
15-05-2025
- Business
- Yahoo
What Services Or Tasks Do Customers "Never" Remember To Tip For But Seriously Should?
On the internet, tipping culture is one of the most constantly debated topics. And with the rise in app-based services like food delivery, home decor setup, and beauty treatments at home, there are never-ending opinions about what to tip for and how much. Related: Eat At Some Popular Restaurant Chains For A Day And I'll Guess Your Hair Color So we want to hear directly from people with their boots on the ground. If you work in hospitality, care, or other service-based industries, what's something that people rarely tip you for but really, really should? Related: Make A Really, Really, Really Pretty Disney Princess Dress And I'll Let You Know Your Ideal Home Design Style For example, do you tip the shampoo person at the hair salon? Yes, according to hairstylists. How about baristas? Or your dogwalker? Tell us your thoughts in the comments or in the anonymous form below. The best responses may be featured in an upcoming BuzzFeed Community post! Also in Community: Curate A Summer Pinterest Board To Reveal Your Summer Aesthetic Also in Community: Create The Dress Of Your Dreams And We'll Tell You What You're The Goddess Of Also in Community: We'll Reveal Your Most Attractive Feature, But First You Have To Enjoy A Rainbow Of Foods
CTV News
13-05-2025
- Business
- CTV News
Have you been asked to tip somewhere you didn't expect? We want to hear from you
The list of places you could be asked to tip keeps growing: self-checkouts, drive-throughs, even bakeries. For many consumers, the latest tip-related irritant at checkout is a new phenomenon known as 'tip creep.' Across Canada and the U.S., tip creep is when prompts asking for tips pop up in unlikely places, including bottle shops and jewellery stores. That's a shift from tradition, where gratuities are typically reserved for dine-in restaurants and bars. Experts say the trend has emerged partly due to the proliferation of digital payment systems. 'To me, the strongest social norm is tipping in a sit-down restaurant,' University of Guelph professor and food economist Mike Von Massow told 'The rest have been sort of fuzzy in the past and have become more broad in recent years, particularly I think because (payment) machines can now make it easy to ask for it.' In countries like Canada and the U.S., many service workers often rely on tips for a significant portion of their income, unlike their counterparts in countries like France, Japan or China, where tipping is almost non-existent. During the COVID-19 pandemic, tipping surged amid a groundswell of gratitude for restaurant staff, delivery drivers and other front-line service workers, who helped keep businesses stay afloat. But that generosity began to fade as soaring inflation eroded consumers' purchasing power. As cash-strapped households sought discounts, many became more leery of extra costs like tips. Meanwhile, businesses continued to encourage higher tips, fuelling the rise of the now-popular term 'tipflation.' Many Canadians have cut back on tipping in recent years. According to a recent survey by H&R Block, 90 per cent of Canadians believe tips are too high, while 82 per cent say tipping is expected in more places than ever before. Almost one in four surveyed say they have been asked to tip 'in places or situations that felt uncomfortable or unexpected.' Among survey respondents, a reasonable tip on average is just nine percent, well below what is usually suggested by most businesses. In response to mounting public frustration, the Quebec government has recently passed a new law meant to improve transparency in service and consumer transactions. Businesses in the province are now required to calculate suggested tips based on the price before tax. That means if your dinner costs $100 before tax, a 15 per cent tip will now be $15 — not $17.24, which includes Quebec's combined sales and federal taxes. The new rules also require restaurants and cafes to display suggested tip options neutrally, with no bolded or highlighted choices. Tipping will also remain optional. Have you been asked to tip somewhere that you didn't expect? Do you draw the line at tipping at certain establishments? What's the highest percentage you feel comfortable tipping? Share your questions by emailing us at dotcom@ with your name, general location and phone number in case we want to follow up. Your comments may be used in a story.
