Shake Shack’s Danny Meyer Is Banishing Tips at All of His Restaurants

Danny Meyer speaks at the National Governors Association. (Photo: AP)

New York City Restauranteur Danny Meyer, best known for his super-popular burger chain Shake Shack, announced Wednesday that he’s eliminating tips at all of his restaurants.

The sweeping change will impact how employees are paid at his 13 restaurants around the city, including MoMa’s The Modern, the Union Square Cafe, and Gramercy Tavern.

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While a number of restaurants have adopted this policy, Meyer’s restaurant group is the biggest and best known to make the move.

As a result of doing away with tips, menu prices will be raised so that employees across the restaurants are paid better wages, including cooks, dishwashers, and other kitchen workers. Servers, meanwhile, are expected to keep relatively the same pay.

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“The gap between what the kitchen and dining-room workers make has grown by leaps and bounds,” Meyer told the New York Times. During his 30 years in the business, “kitchen income has gone up no more than 25 percent.”

Meanwhile,” he added, “dining-room pay has gone up 200 percent.”

“I hate those Saturday nights where the whole dining room is high-fiving because they just set a record, and they’re counting their shekels, and the kitchen just says, ‘Well boy, did we sweat tonight,’” Meyer told Eater.

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The issue of wages for those in the food service and restaurant industries has been gaining attention. New York recently approved phasing in a $15 an hour minimum wage for workers at fast-food chains in the state, and several cities around the country have set the same minimum for all workers.

It is still rare to find a restaurant that doesn’t have tipping.

At the Black Star Co-op Pub and Brewery in Austin, Texas, gratuities have never been accepted, and business team leader Dana Curtis was happy to hear of Meyer’s move.

“I think it’s great,” she said. “I think it raises public awareness about economic inequality, it starts a public conversation about fair wages.”

Melissa Fleischut, president and CEO of the New York State Restaurant Association, said other restaurants could be inspired to follow Meyer’s lead.

“I think that because it is Danny Meyer and he is considered a leader in the restaurant industry, that a lot of people are going to look at this move,” she said.

The Associated Press contributed to this report.