This is the Latest Restaurant Chain to do Away With Tipping
Joe’s Crab Shack, a nationwide chain with more than 100 locations, is the latest restaurant to test a no-tipping policy.
In a statement sent to Fortune, the CEO of parent company Ignite Restaurant Group (IRG), Ray Blanchette, confirmed the plan which is currently in place in 18 locations across the country.
“No timeline has been established as to when other locations may be included,” Blanchette said. “Again, this is a pilot program and has not been rolled out nationally.”
Here’s how it works: Team members at the restaurants are “paid at a higher, fixed hourly rate, starting at $12 per hour,” according to Blanchette, and credit card receipts will no longer have a tip line.
“We are confident that this change will provide increased financial stability for our employees,” Blanchette said. “A small price increase was taken to account for the added labor cost, but the policy is designed to benefit both the guests and employees.”
Joe’s Crab Shack is boosting menu prices around 12 to 15%, according to Restaurant Business. The new no-tipping policy comes after a tough quarter for the chain, in which comparable-store sales dipped 6.6%.
Last month Danny Meyer, the founder of Shake Shack, announced that he was doing away with tipping at his own group of restaurants.