How the No-Tipping Movement Could Go Mainstream
This winter harried restaurant workers of America will be watching Joe’s Crab Shack. In November, Joe’s became the first national chain to ban tipping—testing the practice at more than a dozen locations.
The chain, which has over 100 locations in the U.S., is owned by Ignite Restaurant Group. When the company announced the plan to stop tipping, CEO Ray Blanchette said there was “no timeline” for when more locations would be added to the initiative. “This is a pilot program and has not been rolled out nationally,” he said.
But that national rollout could be coming—at Joe’s and beyond. Less reliance on tips gives workers a more stable income, Joe’s COO David Catalano said in an interview with Fortune. The decision also comes as minimum wage has been a key topic among presidential hopefuls during the election, and buzzy restaurateur Danny Meyer, founder of Shake Shack, said he was getting rid of tipping at his own group of restaurants. “We looked at it and said we can take a position,” Catalano says.
As part of the deal, employees’ base salaries go up to about $12 per hour, and customers will be charged 12% to 15% more to offset costs. If they pay it, more chains could follow suit.
“We take a lot of pride in leading boldly,” Catalano added. “We really feel this could be a solution that benefits our employees.”
A version of this article appears in the December 15, 2015 issue of Fortune.