Danny Meyer, one of New York’s most prominent restaurateurs, has announced he is planning to eliminate tipping in his eateries, a move that could inspire others to follow suit.
The restaurateur, who owns 13 restaurants including The Modern, said the tipping system was unfair as it only benefited a few restaurant workers.
Waiting staff typically receive most of their wages in tips, but cooks and other workers do not.
Danny Meyer plans to start the policy at four of his restaurants in November 2015.
Menu prices will increase 25% to 35% to account for the changes.
Restaurants in the US are rethinking how they compensate their employees for a number of reasons.
In major cities like New York, Chicago and San Francisco, restaurants are finding it hard to retain kitchen staff as the cost of living in those areas increases.
Because of tips (typically 20% of each bill), servers sometimes end up earning much more than highly skilled cooks.
Restaurant workers across the US have also been lobbying for better wages in recent years. New York City and other cities and states have increased their minimum wage in response.
Some high-end restaurants in have already stopped accepting tips, but Danny Meyer’s empire is the most prominent restaurant group to date to embrace the move.
Melissa Fleischut, president and CEO of the New York State Restaurant Association, said Danny Meyer’s decision could have a ripple effect in the industry.
“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,” she said.
Danny Meyer’s restaurants and other businesses include: Union Square Cafe, Gramercy Tavern, Blue Smoke and Jazz Standard, Shake Shack, The Modern, Cafe 2 and Terrace 5 at MoMA, Maialino, Untitled at the Whitney Museum, Union Square Events, and Hospitality Quotient.