On Wednesday, one of New York’s most prominent and famous restaurateurs announced plans to eliminate tipping in his restaurants, a move that could inspire other companies to follow suit. All of the 13 restaurants in Danny Meyer’s Union Square Hospitality Group will stop accepting tips as part of a sweeping overhaul in how his employees are paid. Meyer plans to implement the policy at four of his restaurants in November.
Meyer said the current tipping system is unfair as it only benefits a small percentage of restaurant workers. While wait staff in the United States generally receive most of their wages in the form of tips, cooks and other restaurant staff do not.
Meyer said in a statement that, “We believe hospitality is a team sport, and that it takes an entire team to provide you with the experiences you have come to expect from us.” He also pointed out that, “The gap between what the kitchen and dining-room workers make has grown by leaps and bounds.” He noted that, during his three decades in the business, “kitchen income has gone up no more than 25 percent. Meanwhile, dining-room pay has gone up 200 percent.”
Of course, the change in wage structure will affect patrons of the restaurants. Meyer announced that the menu prices for his restaurants will increase 25% to 35% in order to offset the changes.
Meyer’s decision comes as restaurants across the United States are re-evaluating how they compensate their wait staff and other employees. In cities like New York, San Francisco and Chicago, it is difficult for restaurants to retain kitchen staff as the cost of living in the areas steadily increases.
Tips, which are usually about 20% of each bill, mean that wait staff end up earning much more than extremely skilled chefs and cooks.
Restaurant workers across the country have been lobbying for better wages for several years. In response, New York City and some other cities and states have increased their minimum wage.
Interestingly, some high-end restaurants have already stopped accepting tips, but Meyer’s restaurant empire is the most prominent group to implement the practice.
President and CEO of the New York State Restaurant Association, Melissa Fleischut, believes Meyer’s decision will likely trickle down to the rest of the industry. She stated that, “I think that because it is Danny Meyer and he is considered a leader in the restaurant industry, that a lot of people are going to look at this move.”