The Modern's No Tipping Policy Is Already Helping to End Its Cook Shortage Crisis

Danny Meyer's most expensive restaurant, The Modern, will officially debut its "Hospitality Included" system on November 19, Union Square Hospitality Group announced Monday night — a change that's already attracted two to three new back-of-house applications per-day and is helping to end the restaurant's cook shortage crisis.

As Eater has previously reported, USHG plans to eliminate tipping from its 13 restaurants and is starting with the new staff salary and menu pricing models at The Modern. Meyer and other key USHG players, including The Modern's executive chef Abram Bissell, spoke to 100 guests of the group's restaurants and media at a town hall event on Monday night at the Martha Washington Hotel.

Bissell revealed that word of planned changes has already started to attract more applications to back-of-house positions than the restaurant has had in a long time. As early as three months ago, The Modern's kitchen was in "crisis" mode, down 12 employees in a kitchen that needs 45 people. They were only receiving two to three applications per month. Meanwhile, the kitchen had to continue running at its normal pace. "[It's] stress on managers, stress on the kitchen, but it’s also affecting the quality of what you’re getting as a diner at a restaurant," Bissell said.

But since USHG announced its "Hospitality Included" program — a plan where cooks start at $14-per-hour — The Modern has received two to three applications per day. They're high quality applicants, too, said Sabato Sagaria, the group's chief restaurant officer. "He wants to hire every one of them," Sagaria noted. USGH plans to find homes for qualified people in one of the group's other dozen restaurants, Sagaria said.

Danny Meyer sees the Hospitality Included program as a way to treat his employees well, a ripple effect that will hopefully mean a better experience for diners as well, he told the town hall guests. Quality of life for kitchen staff is a struggle when they legally can't be paid with tips from diners, he explained. At one point in his Battery Park City restaurant North End Grill, more Culinary Institute of America graduates worked in the front-of-house than in the kitchen. "If you’re somebody who loves hospitality and you love the restaurant business ...but the only way you can afford to live in a city like New York is to serve the food and not cook the food, you don’t have the luxury of making a choice," Meyer said.

A recent poll found that the majority of diners are against a no-tipping policy, but most guests who showed up to the town hall were diehard fans of Meyer and trusted him to implement the plan, even when Sagaria said menu prices could go up as much as 28 percent to account for both a 20 percent tip and salary increases. "It'll be an adjustment," said Pauline Villarin, a longtime Union Square Cafe diner. "But it makes sense. It will be great for restaurant employees."

And Meyer explained that eventually, diners will be able to rate their experience at the restaurant with stars, much like Uber riders can rate their drivers at the end of the ride. It's a better system than tipping, where most people give the same amount no matter how the service was, he said. The stars, in turn, will be used to reward servers as part of the revenue share program that will be replacing tips as an incentive program. "Today I don’t know who the weakest links are on our team," Meyer said. "We will know that [with the rating system]."

It's clear other chefs and restaurateurs are looking to see what happens with Meyer's restaurants. Several industry folk were in the audience, including Andrew Tarlow of Marlow & Sons and other Brooklyn restaurants, Joe Campanale of the Epicurean Group, and Christian Pappanicholas of Resto and The Cannibal. At least one restaurateur told Eater that they have been "seriously considering" implementing no tipping for months and are watching to see what happens with Meyer. "There are big changes happening," said Tarlow, who showed up out of curiosity. "We are exploring all those options. We want to be as thoughtful as possible."

Despite the dramatic increase in applications to The Modern, there's still a shortage in the number of cooks available at fine dining restaurants, Sagaria explained. But now it's clear that the policy matters to candidates, he added. Bissell told an anecdote about how one of his cooks is planning to propose to his girlfriend on the 19th, when he feels he can plan financially for a ring because of the new system. "That meant a lot to me," Bissell said. "This is making it possible for them to live somewhat of a normal life."

Eater Video: The economics of the tipping debate