No more tipping at Joe’s Crab Shack

National seafood restaurant chain Joe’s Crab Shack announced Wednesday it is testing a no-tipping model at a few of its restaurants.

Federal minimum wage law allows employers to offer the lower pay as long as their tips made up the difference, but that’s sometimes the problem.

Tipping has been in the news recently, mainly due to disgruntled servers not receiving a tip and voicing their concerns across social media.

A popular restaurant chain is telling its customers to hold the tip.

Joe’s Crab Shack will apply the no-tip model in a select and broad range of its locations to see how customers respond.

Ray Blanchette, Ignite Restaurants CEO, says most businesses in America have already migrated away from tipping over the last 50 to 100 years. “It’s simple, really”, said Blanchette.

“We believe that consistently great service should always be included in the menu price, so we are taking the responsibility for paying the service staff”, said Ray Blanchette, chief executive officer of parent company Ignite Restaurant Group Inc. Menu prices have been adjusted slightly to account for the added labor, but “typically less than the average 20 percent tip”, according to the company. To compensate, servers’ wages will go up from the federal hourly standard of $2.13 to around $12 to $14 an hour. Initial surveys have shown improvement in service at places with the no-tipping policy, it said.

According to the Joe’s Crab Shack release, there is no timeframe for when, or if, the chain will expand the policy to all of its locations, including the 11 restaurants in California. If we’re sitting at a dockside spot having dinner and drinking beers while watching one of our favorite bands play for two or three hours, we’re going to make sure to tip at least 35 percent – and then make sure we have cash for our Uber driver.

Servers at these locations will earn a higher wage, and depending on the location, menu prices will increase around 12% to 15%.

“Ultimately, people are paying less and hopefully we are delivering more value”, Blanchette said. He also said minimum wage increases nationwide encouraged the company to re-evaluate worker’s compensation and make restaurant work more sustainable.

Minimum wage workers have faced opposition in efforts to increase their pay. The median wage for tipped workers in the USA (including tips) is about $9 an hour, said Jayaraman.