NYC restaurant bans tips, pays staff on salary with vacation and benefits

Shereen Dindar
Shine OnJune 11, 2013

Staying true to its Japanese roots, a sushi restaurant in Manhattan renowned for it's excellent and pricey fair is now going tip-free.

That's right, even if you want to tip at the 14-year-old Sushi Yasuda restaurant, you can't. That's because the owners have increased their prices to compensate workers with salaries including benefits and vacation time.

The revolutionary move is relatively unheard of in North America, though common in Japan.

“I’ve always dreamed...wouldn’t it be great not to have to worry about tipping?” owner Scott Rosenberg tells The Price Hike. “You won’t have think and calculate and do a math at the table.”

His restaurant does not even include a line on the bill for a customer to leave a tip, but does have a written explanation at the bottom to avoid any confusion.

Also see: Paltry tip on big bill kicks off debate

“We felt that approach really didn’t make sense,” he says of a tip line. “We felt it was cumbersome and confusing.”

Rosenberg claims there has been no decline in service since the new policy, and in fact, the customers are paying in total around the same amount.

Aside from creating a better dinning experience for his customers, the change in policy also stems from a desire to be fair to all employees.

"The laws around tipping and how they’re divided get really convoluted and there aren’t really clear guidelines on how to tally it up,” he says of how restaurants traditionally distribute tips.

Rosenberg is striving to attract more committed staff with the new salaried pay.

"It attracts people who are more serious about being a part of that craft and being a part of that journey,” he says.

Also see: Is it ever OK to leave an excuse instead of a tip?

Andrew Moesel, a spokesperson for the New York City chapter of the New York State Restaurant Association, tells ABC that having salaried restaurant employees can eliminate hassle for the employer.

“Wage and tip lawsuits are on the rise, since rules are becoming increasingly complicated," says Moesel, who claims tip-free restaurants have gained traction at other high-end establishments in Chicago.

“Whether or not this is a culinary trend, this is something we’re seeing more of.”

Though factoring tips into food costs does come with some drawbacks. For example, a customer who receives exceptionally terrible service might want to leave a zero dollar tip to send a message to the owners to clean up their act.

Or on the other extreme, it prevents customers from leaving an exceptionally amazing tip if they feel a server went above and beyond -- as was the case with this waitress who scored almost $500 on a $6 bill.

What are your thoughts about a tip-free restaurant? If the end result is you pay around the same amount, would the lack of math calculations appeal to you? Sound off in the comments.

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