Joe’s Crab Shack announced Wednesday it will be eliminating tipping from several of its restaurants, joining the growing national movement to get rid of tipping in American restaurants.
The popular seafood chain, which has 130 locations across the country, is the first major restaurant chain to stop tipping which goes against the entrenched norm.
With the new policy, servers at the selected restaurants will now earn hourly wages of $12-$14. In order to support this new wage model, the menu prices will increase from 12 to 15 percent. Raymond Blanchette, president and CEO of Ignite Restaurant Group which owns Joe’s Crab Shack, said menu prices are rising only marginally with the elimination of the tip, so ultimately people could potentially pay less.
Joe’s Crab Shack is joining the ranks of individuals like Danny Meyer, restaurateur and CEO of the Union Square Hospitality Group, who announced last month that he will be eliminating tipping in 13 of his restaurants in New York City. Similarly, Tom Colicchio, restaurateur and a judge on Bravo’s show “Top Chef,” did away with tipping in the lunch service for the Gramercy Tavern, another New York City restaurant that he co-owns with Meyer.
The growing movement is a part of the effort to address server’s wages and reduce turnover. Under the current two-tiered system, the federal minimum wage for a tipped employee is $2.13 an hour. This means that a server’s living wage depends almost entirely on tips.
The no-tip movement is also influenced by another growing movement, the “Fight for $15” and its push to raise minimum wages for fast food workers to $15 an hour.
Joe’s Crab Shack will apply the no-tip model in a select and broad range of its locations to see how customers respond. Blanchette said they could eventually expand the policy nationwide.