Case Study Joe's Crab Shack
The no tipping club has just earned its biggest member yet. Joe's Crab Shack has just announced that it will abolish tipping at 18 of its branches around the country. The move marks the first time a major restaurant chain has dabbled with a tip-free salary scale.
According to Restaurant Business, servers at the affected locations will see their new wages start at $14 an hour. That figure may rise depending on the employees' track record and past performance says the report.
The salary increase is being offset by a 12 to 15 percent price increase across the menu.
During an earnings call with investors last week, company CEO Raymond Blanchette said, "Servers, hosts, bartenders are paid now higher, fixed, hourly wages and it's expected to result
in an improved team atmosphere, a significant reduction in turnover and greater financial security for the employees."
Blanchette said that the no-tip experimenting was actually in effect since August. He also mentioned that the decision, despite the price increases, might actually save customers money in some cases.
The no-tipping debate has been a hot topic in recent weeks. Last month, noted New York restaurateur and Shake Shack founder Danny Meyer announced he was scrapping tipping from all the establishments under his Union Square Hospitality Group banner.
Over 1,800 employees across well-known NYC locales like Gramercy Tavern, Maialino, and Union Square Café were affected.
"The gap between what the kitchen and dining room workers make has grown by leaps and bounds." Said Meyer to the New York Times. "Kitchen income has gone up no more than 25 percent. Meanwhile, dining room pay has gone up 200 percent."
Back in June, we profiled a similar case about an Oregon restaurant owner who was scrapping tipping for the same reasons Meyer mentioned.
According to Restaurant Business, servers at the affected locations will see their new wages start at $14 an hour. That figure may rise depending on the employees' track record and past performance says the report.
The salary increase is being offset by a 12 to 15 percent price increase across the menu.
During an earnings call with investors last week, company CEO Raymond Blanchette said, "Servers, hosts, bartenders are paid now higher, fixed, hourly wages and it's expected to result
in an improved team atmosphere, a significant reduction in turnover and greater financial security for the employees."
Blanchette said that the no-tip experimenting was actually in effect since August. He also mentioned that the decision, despite the price increases, might actually save customers money in some cases.
The no-tipping debate has been a hot topic in recent weeks. Last month, noted New York restaurateur and Shake Shack founder Danny Meyer announced he was scrapping tipping from all the establishments under his Union Square Hospitality Group banner.
Over 1,800 employees across well-known NYC locales like Gramercy Tavern, Maialino, and Union Square Café were affected.
"The gap between what the kitchen and dining room workers make has grown by leaps and bounds." Said Meyer to the New York Times. "Kitchen income has gone up no more than 25 percent. Meanwhile, dining room pay has gone up 200 percent."
Back in June, we profiled a similar case about an Oregon restaurant owner who was scrapping tipping for the same reasons Meyer mentioned.