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Restaurants ditch tips for fair pay: new trend?

Restaurants are experimenting with how their tip structure works with some eliminating them altogether. Could this mean more fair pay for staff and a better customer service experience? Or is it just a public relations stunt?


tipping fair pay

Restaurants ditching tips, but why?

Famed New York sushi joint, Sushi Yasuda has grabbed headlines for eliminating tips and paying salaries to all workers, which the owners say is a Japanese tradition. While the reasoning is different (to honor the Japanese model), it is not the first restaurant to eliminate tips in America, as Black Star Co-op in Austin builds tips into the pricing automatically.

Sushi Yasuda has taken it an additional step further and explained to their customers on every receipt and menu why there is not even a space left for a tip amount. “Following the custom in Japan, Sushi Yasuda’s service staff are fully compensated by their salary. Therefore gratuities are not accepted. Thank you.”

Several restaurants like the Linker in San Diego are eliminating tips, but are building in a compulsory 18 to 20 percent tip on top of the bill, calling it gratuity or a service charge.

The risk for these experiments is that prices may seem unreasonable to the average patron who doesn’t read further into the offering to see that tips are essentially included, so it is a brave move on the part of any establishment seeking to improve how they pay employees and make for a more cohesive and fair experience for employees and customers.

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The pay model for restaurants is not likely to shift dramatically in the near future, so we wouldn’t exactly call it a trend, but restaurant goers will likely see experimentation of this nature on their receipts in coming years as restaurant owners seek to maximize profits but do a better job of retaining employees. Paying far below minimum wage has always been a baffling offering, as wait staff may make a few hundred dollars on one night, but barely $20 on another. The costs a restaurant could save by having salaried employees with far lower turnover could even everything out and create a more fair pay model for the industry and likely a better customer service experience.

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