Joe's Crab Shack Just Became The First Major Chain To Get Rid Of Tipping

Photo: David Kozlowski/Getty Images.
When Danny Meyer, head of the Union Square Hospitality Group, revealed he would begin to phase out tipping at his New York restaurants, many speculated that this move might start a trend. And if the recent announcement from Ignite Restaurant Group is any sign, that trend may be catching on. Ignite, which owns Joe’s Crab Shack, announced that it is experimenting with phasing out tipping at its restaurants, starting with 18 locations.

The news from Ignite marks the first time a national chain has experimented with doing away with tipping. Now, waitstaff at Joe’s will see their wages start at a $14/hr flat rate, instead of $2.13/hr plus tips. To cover the additional cost, the restaurant's prices will increase about 15% — which means an actual decrease in the cost of eating at Joe’s for generous folks who add upwards of 20% to their bill as tip.

CEO Ray Blanchette revealed the no-tips decision to investors last week, explaining that the move was motivated by a number of factors. For one thing, Blanchette hopes steadier wages will reduce staff turnover. Additionally, this will solve the problem of waitstaff having to split tips when more than one person is serving a large group.

As Refinery29 reported earlier this week, the move to end tipping is one that is supported by many advocates in the restaurant industry; organizations such as the Restaurant Opportunities Center believe that freeing workers from relying on tips will not only increase salaries but also decrease instances of sexual harassment.

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