One of the country’s best-known restaurateurs, Danny Meyer, announced five years ago that his Union Square Hospitality Group would gradually eliminate tipping. The group’s decision began an industrywide examination of the age-old practice, but adopting it proved complicated, especially in New York State, where laws governing tip distribution are strict.
Still, especially in recent months, many Americans have come to agree with Mr. Meyer that tipping contributes to unequal pay, racism, sexual harassment and power disparities in the industry.
But on Monday, the company reversed course. Mr. Meyer told his staff that Union Square Hospitality would abandon what it calls its “Hospitality Included” policy as its restaurants reopen for outdoor dining, starting on Thursday with the flagship Union Square Cafe in the Flatiron district and extending to the nearby Gramercy Tavern in the coming weeks. (Some of the group’s other businesses are already open for takeout and delivery, and all will shift to tipped wages immediately.)
Mr. Meyer said in an interview that he still believes that tipping contributes to inequitable pay, wage instability and other problems, and that he is collaborating with the national One Fair Wage campaign to eliminate it. But as the restaurants begin rehiring today — about 95 percent of the staff has been laid off since March — he is unwilling to deny any extra compensation that might be available to employees in a time of economic crisis.
“We don’t know how often people will be eating out, we don’t know what they are going to be willing to pay,” he said. “We do know that guests want to tip generously right now.”
The Hospitality Included model, which eliminated tips in favor of a consistent hourly wage, was adopted over several years as New York State’s minimum wage rose to $15 per hour. The extra labor costs for the restaurant were reflected in menu prices, which increased by 15 to 20 percent. In theory at least, the customer’s actual cost per meal would be about the same.
Wilma Cespedes-Rivera, a bartender at Blue Smoke, a Union Square Hospitality restaurant in Lower Manhattan, has worked for the company for five years. She said that for servers, the change from tipping to Hospitality Included was painful, and many talented colleagues left for other jobs.
“People understood that the goal was a healthier balance,” she said, “but it wasn’t what we signed up for financially.”
In New York State, only employees who spend at least 80 percent of their time interacting with customers — so-called front-of house-workers like bartenders, bussers and servers — can legally receive tips; cooks and kitchen workers (back-of-house employees) cannot.
Especially on weekends, when tabs and tips run higher, the difference in earnings can be stark, and often generates conflict between the two groups.
Now that employees like Ms. Cespedes-Rivera will likely again earn more than kitchen workers, Mr. Meyer said, his group will institute a revenue-sharing system for back-of-house employees, and their overall compensation will go up 20 to 25 percent.
After Mr. Meyer announced the move to end tipping in 2015, some other industry leaders, including David Chang and Tom Colicchio, tried to follow suit at their restaurants. But for most New York restaurateurs, the experiment did not last; many customers, as well as servers, remain attached to tipping.
Fair pay, like virtually every aspect of the hospitality business, is currently being scrutinized by chefs and owners as they contemplate reopening with reduced capacity, added risks and high costs.
Amanda Cohen, who has maintained a no-tipping policy at her Lower East Side restaurant Dirt Candy since 2015, said the national movement away from tipping is gaining momentum during the pandemic.
“It’s really changing the way people think about work,” she said. Especially in states where tip sharing and surcharges are allowed, like California, restaurants are coming up with new ways to compensate employees that don’t privilege one group over another. “Every little breakdown in the system helps,” she said.
The Coronavirus Outbreak ›
Frequently Asked Questions
Updated August 6, 2020
Why are bars linked to outbreaks?
- Think about a bar. Alcohol is flowing. It can be loud, but it’s definitely intimate, and you often need to lean in close to hear your friend. And strangers have way, way fewer reservations about coming up to people in a bar. That’s sort of the point of a bar. Feeling good and close to strangers. It’s no surprise, then, that bars have been linked to outbreaks in several states. Louisiana health officials have tied at least 100 coronavirus cases to bars in the Tigerland nightlife district in Baton Rouge. Minnesota has traced 328 recent cases to bars across the state. In Idaho, health officials shut down bars in Ada County after reporting clusters of infections among young adults who had visited several bars in downtown Boise. Governors in California, Texas and Arizona, where coronavirus cases are soaring, have ordered hundreds of newly reopened bars to shut down. Less than two weeks after Colorado’s bars reopened at limited capacity, Gov. Jared Polis ordered them to close.
I have antibodies. Am I now immune?
- As of right now, that seems likely, for at least several months. There have been frightening accounts of people suffering what seems to be a second bout of Covid-19. But experts say these patients may have a drawn-out course of infection, with the virus taking a slow toll weeks to months after initial exposure. People infected with the coronavirus typically produce immune molecules called antibodies, which are protective proteins made in response to an infection. These antibodies may last in the body only two to three months, which may seem worrisome, but that’s perfectly normal after an acute infection subsides, said Dr. Michael Mina, an immunologist at Harvard University. It may be possible to get the coronavirus again, but it’s highly unlikely that it would be possible in a short window of time from initial infection or make people sicker the second time.
I’m a small-business owner. Can I get relief?
- The stimulus bills enacted in March offer help for the millions of American small businesses. Those eligible for aid are businesses and nonprofit organizations with fewer than 500 workers, including sole proprietorships, independent contractors and freelancers. Some larger companies in some industries are also eligible. The help being offered, which is being managed by the Small Business Administration, includes the Paycheck Protection Program and the Economic Injury Disaster Loan program. But lots of folks have not yet seen payouts. Even those who have received help are confused: The rules are draconian, and some are stuck sitting on money they don’t know how to use. Many small-business owners are getting less than they expected or not hearing anything at all.
What are my rights if I am worried about going back to work?
What is school going to look like in September?
- It is unlikely that many schools will return to a normal schedule this fall, requiring the grind of online learning, makeshift child care and stunted workdays to continue. California’s two largest public school districts — Los Angeles and San Diego — said on July 13, that instruction will be remote-only in the fall, citing concerns that surging coronavirus infections in their areas pose too dire a risk for students and teachers. Together, the two districts enroll some 825,000 students. They are the largest in the country so far to abandon plans for even a partial physical return to classrooms when they reopen in August. For other districts, the solution won’t be an all-or-nothing approach. Many systems, including the nation’s largest, New York City, are devising hybrid plans that involve spending some days in classrooms and other days online. There’s no national policy on this yet, so check with your municipal school system regularly to see what is happening in your community.
Although a new law in New York State will end the tipped minimum wage for most workers on Jan. 1, the measure excludes restaurant servers, who can continue to collect tips and be paid a lower hourly wage.
In December, Gov. Andrew M. Cuomo’s office described the new law as “the end of the sub-minimum wage,” and announced that the decision was based on findings from the state Department of Labor that tipping is disproportionately harmful to “the lowest-paid workers in our state: women, minorities and immigrants.”
Although the law applies to nail salon workers, dog groomers and many others, restaurant workers — the largest group of tipped employees in the state — are exempt.
“Until the law allows all of our workers be paid a fair wage, tips are the only way to make the system work,” Mr. Meyer said.
But for small-scale restaurateurs facing existential challenges, tipping policy is “not high on the list” of priorities, said David Helbraun, a lawyer in Manhattan whose firm represents more than 1,000 restaurants.
He said his clients have one concern these days: cash flow. With restaurants barely operating for the foreseeable future, rent relief (or money from governments to pay it and other costs) is all that matters.
“None of the rest of it matters if you can’t pay the rent,” he said.