Should tips for people that earn less than the poverty level be exempt from credit card transaction fees.?

The whole culture of tipping should be ended. It just allows employers to pay low wages and expect someone else to pay the rest.

When I do my weekly shop , I don’t add a 15% tip at the checkout , so why do I have to do it in a restaurant ?

That is IMPOSSIBLE. The card processors have no way on knowing what portion of the transaction is a tip, or if the person receiving the tips is above or below the poverty line.

That said, employers that allow tips paid by cards are not supposed to be allowed to deduct card processing fees from the tips.

They aren't taking a cut of the tip.  They are charging a fee for the service they provide.

If the business doesn't want to pay for that service, then they can stop accepting credit cards.

Why on earth should credit card companies and banks be compelled to provide their services for free?

Snowflake...

Nobody tips at a fast food place; but if you want to, give them green cash. BUT ... fast food jobs are generally part-time and thus below the poverty level, even though the workers get federally (or state) mandated wages.

Very few hourly employees of fast food places have credit cards. And WHAT transaction fees?  I've never had any in 35 years. You clearly have no idea what you are talking about.  Also 99.999% of hourly employees of fast food places are not tipped.

The credit card company does know which is the tip and which is the payment, the customer enters how much to add as a tip. People talking rubbish on here again.

I don't think that applies to fast food places.  If you wanted to tip them, you would have to do it in cash.  I deliver pizzas, and when people order, there is a space to fill in a tip, and it gets added to the credit card charge.  I get 100% of that money, but I do get taxed on it.

I don't think it's technically possible for them not to take a cut.  The credit card company doesn't know how much was what the restaurant charged and how much was the tip.  They only know what the total was, so if they charge a fee at all, then it has to be for the total; the only way for the tip to be exempt would be if everything, including the cost of the food, was also exempt.

The credit card company does not take a portion of the tip.

The credit card company charges the employer for the fee, this is not taken from the employee's tip.