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Tipping is on the tip of everyone’s tongue these days. On the one hand, the term “typflation” has been coined to describe disdain for the rising cost of living, including increased social pressure to tip.

Likewise, President-elect Donald Trump said earlier this year that plans to end tip taxes – a stance that Kamala Harris also took. But where does the rest of the United States stand when it comes to this aspect of compensation? How does this affect employers?

Customer experience

Most people in the United States feel “uneasy” or “uncomfortable” about the number of companies that request tipsaccording to a Paylocity study conducted in partnership with The Harris Poll.

In particular, there is a slight age difference in feelings about tipping. Baby boomers tend to feel more uncomfortable than Generation Z; compare between 74% and 66%, respectively. Overall, consumers feel that tipping should be “reserved for specific businesses,” with baby boomers agreeing more (79%) than Gen Z (62%).

Salary restructuring may be the best practice

By reading the report, employers can do more than simply learn that consumers resent tipping culture.

“The growing discomfort with tipping suggests the need for companies to reconsider their tipping policies,” Paylocity researchers said. “Employers could explore alternative compensation models that reduce reliance on tips.”

Additionally, 83% of tipped workers said they would prefer a higher wage without tips, rather than a lower base wage supplemented with tips, Paylocity found.

The employer brand piece

Paylocity researchers noted that ensuring fair wages is crucial to both the employee experience and “public perception.”

Although most respondents were against the current tipping culture, most people are also against paying tipped workers less: 61% opposed paying tipped employees less. , and 28% were strongly opposed.

Naturally, frontline workers agreed: 58% opposed and 25% strongly opposed paying workers less tips.

Looking to the future of tipping

During a June 2024 rally in Las Vegas, a city where the hotel industry is king, Trump said he would end tip taxes. would be “the first thing” I would do it if I were re-elected.

He noted that the tip tax had been “a point of contention for years and years and years,” singling out hotel and restaurant workers in particular.

Ultimately, the decision rests with Congress. Currently, workers report their tips to the IRS, which in turn considers this earned money as taxable income.

If Republicans take control of both the House and Senate, something the party has a great possibility to do so, starting Thursday afternoon – Trump will have a good opportunity to implement the policy.

Since Harris also embraced the policy during her campaign, Trump may even have bipartisan support.