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Why some US restaurants drop tips for higher wages

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Why some US restaurants drop tips for higher wages

2026-08-24 23:04 UTCBy AlphaScala Research DeskSource reporting: bbc.co.ukEditorial standards

Why some US restaurants drop tips for higher wages

At La Cigale in San Francisco, a $140 fixed-price dinner includes no tip and staff earn $40 an hour. Not every restaurant succeeds with the model.

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A small number of US restaurants have stopped accepting tips. They charge higher menu prices instead and pay staff a straight hourly wage. The model works for some. Others have abandoned it.

La Cigale in San Francisco sells a fixed-price dinner at $140 per person. Wine waiter Caroline Kraetzer earns $40 an hour, double what most service staff in the city make. The restaurant tells customers: "What you see is what you pay. We do not accept tips, your kind words and return visits will suffice."

Kraetzer said it is good to no longer be "reliant on the generosity of strangers to pay the bills." Waiting staff at other restaurants can earn plenty from tips, she said, but those hours before and after service, when the dining room is empty, pay minimum wage.

On the other side of the country, Rachel Miller, chef and owner of Nightshade Noodle Bar in Lynn, Massachusetts, moved to a tip-free model five years ago when the restaurant reopened after the pandemic. Her motivation was fairness for the kitchen staff.

"The people breaking their backs and minds in the kitchen – often the least visible and the least celebrated – were taking home a fraction of what the front staff made on tips for the same hours," Miller said. She also said she found it "deeply unsettling" to see higher tips go to white male staff while others got less.

"Tipping lets guests, consciously or not, pay people differently based on gender, race, or sexuality," she said. "I was not willing to let that decide my team's income."

Miller raised prices to cover higher wages. The French-Vietnamese restaurant sells tasting menus starting at $102 for seven courses before 6 p.m. and $126 for nine courses. "Our prices are higher than a comparable restaurant's because they carry the full cost of paying people properly," she said. "That is the trade, and I stand behind it."

Not every restaurant that has tried the model has stuck with it. Talulla in Cambridge, Massachusetts, dropped tips in 2020 so it could pay staff more equitably, then switched back in September 2024.

Co-owner Danielle Ayer said the restaurant raised menu prices 23% but "was only able to sustain this through the winter months." She said operating without tips is "more expensive overall" because tips do not count as restaurant revenue, while higher menu prices do. A venue that raises prices to pay staff more also pays more sales tax.

William Michael Lynn, a professor of food and beverage management at Cornell University and author of "The Psychology of Tipping," said the core problem is that customers struggle with the math. "Higher menu prices make dining out seem more expensive because people do not adequately take into account that they are no longer tipping," he said. "It leads to lower demand."

Dirt Candy, a vegetarian restaurant in New York, was one of the first to ban tipping, back in 2015. Chef and owner Amanda Cohen said she wanted to make pay more equal among her staff, who now earn about $30 an hour. She said many customers "are pleasantly surprised when they realise they don't have to tip 20% on top."

Cassidy Van der Kamp, a filmmaker whose YouTube documentary "Tipless" was inspired by her own experience working in a tip-free restaurant in Oakland, California, said the change brought stability. She was making about $10 an hour plus tips before the switch and earned $21 per hour after. "I had stability for the first time as I knew what I was earning," she said. "I didn't need to look at a low tip and think what did I do wrong?"

Lynn said a major hurdle for tip-free restaurants is that waiting staff who like tips can be hard to keep. Despite growing "tipping fatigue" – diners increasingly annoyed at being asked for 20% or more – he does not see the practice vanishing.

"I do not think tipping is going to be eliminated on widescale anytime soon because the economic disadvantages of eliminating tipping outweigh the advantages," Lynn said.

Miller, back in Lynn, Massachusetts, said she has no regrets. "The clearest measure is that staff stay. Turnover in this industry is brutal, and we have people who have been here since we made the change. It has proven to be highly valued by my guests and team."