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Staying as somewhat of a trend setter, Danny Meyer - the man behind Shake Shack - has announced that all 13 of the restaurants that are part of his Union Square Hospitality Group will eliminate tipping.
The group includes restaurants like The Modern, Union Square Cafe and Gramercy Tavern - it doesn’t include Shake Shack which went public at the end of the year.
Meyer says the decision is motivated by a want to pay kitchen staff that same compensation for great service as those in the dining room. Currently, by law, those in the kitchen are not allowed to share the pooled tips of the dining room.
The gap between what the kitchen and dining-room workers make has grown by leaps and bounds, said Meyer. Speaking with CNBC, he added that during his 30 years in the industry, “kitchen income has gone up no more than 25 percent, meanwhile, dining-room pay has gone up 200 percent."
Addressing this imbalance is a clever way of keeping the staff in the kitchen on par with those in the dining room, retaining staff and allowing those who often put many gruelling hours into the kitchen to take home a stronger wage. Something that’s needed in an industry that is already worried about a shortage of chefs. Meyer says he will increase menu prices at his locations to cover the extra costs.