Restaurants Are Eliminating Tipping

Joe’s Crab Shack has announced that they will be dropping tipping as a method of payment for all of its restaurants. Employees of Joe’s Crab Shack will now be paid $14.00 per hour, but there is also the potential for pay to vary based on each particular employee’s past performance at the restaurant. Joe’s Crab Shack’s parent corporation, Ignite Restaurant Group, first experimented with this policy at 18 of its locations, and will now be implementing it at all 113 of its locations.

Additionally, Danny Meyer, the founder of Shake Shack and Union Square Hospitality Group, which owns restaurants such as the Gramercy Tavern and the Modern in the Museum of Modern Art in New York City, has announced a similar plan. The new “hospitality included” system will drop tipping as a method of pay and will increase wages for all restaurant staff. The objective is to bridge the wage gap between employees such as waiters who work in the front of the house and receive tips, and employees like chefs, who work in the back of the house and do not receive tips. This raise in pay will be offset by higher menu prices, which is leading to backlash from many customers, who believe tipping should be optional. Some customers are also fearful that the quality of service will diminish because the staff has no incentive to provide good service..

The goal of these no-tipping policies is to offer all restaurant employees better pay, and pay which is more fairly distributed. The no-tipping policy will help to retain better employees due to a more consistent and dependable salary being offered. It will have the potential to help restaurants retain employees, especially in light of New York’s plan to increase pay to $15.00 per hour for fast food workers.

The employment lawyers at Fitapelli & Schaffer, LLP are strongly committed to protecting the rights of hard working employees. If you believe you have a potential wage claim, please call the employment lawyers at Fitapelli & Schaffer, LLP at (212) 300-0375 or visit our website at www.fslawfirm.com.