Joe's Crab Shack To Begin Testing No-Tipping Policy

Published by: Kelly Curtis on 11th Nov 2015 | View all blogs by Kelly Curtis

Joe's Crab Shack To Begin Testing No-Tipping Policy

Joe's Crab Shack this week began testing a no-tipping policy in 18 of its 130 restaurants across the country, paying servers a higher hourly rate, raising prices to compensate and removing the tip line from credit card receipts. The move makes the company the first national chain to test a no-tipping policy after a handful of smaller, local chains have tried the concept. Servers typically earn $2.13 per hour plus tips, but that federally-mandated minimum hasn't been increased since 1991. Most recently, New York-based Union Square Hospitality Group did away with tipping at its 13 New York eateries, including the Gramercy Tavern and Union Square Cafe. A spokesman for the company said that menu prices would increase about 20 percent as a result of the move.

According to the Restaurant Opportunities Centers United (ROC), a group that lobbies for fair wages for restaurant workers, there are currently just over 3.3 million workers in the US that rely on tips to make a living. He median wage for those workers, including tips, is about $9 an hour. The shift to the non-tipping model, ROC says, is a step in the right direction, and could eventually lead to service professionals being paid a fair wage, closer to $15 per hour. Of course, it will likely take years for more restaurant chains to make the adjustment, and many won't even entertain the concept until it's proven by early pioneers like Joe's Crab Shack.

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