Café China, Midtown's Michelin Star Sichuan Restaurant, Eliminates Tipping

Michelin-starred Midtown Sichuan restaurant Café China eliminated tipping earlier this month — a change prompted by owner Xian Zhang's trouble building a management staff with the current model, Zhang tells Eater. Entry-level servers made more than entry-level managers due to tipping, which made few people want to try the management track even though managers can eventually make more, he says. "People didn’t want to take the initial plunge," Zhang says.

Like other restaurateurs that have switched to no tipping — from Danny Meyer to mini-Japanese chain Ootoya — Zhang hopes it will create a culture change that allows people to look at the restaurant as a career instead of a quick way to make cash. That would reduce turnover, which ultimately hurts the restaurant. "Hopefully you can retain the bulk of you staff so you can promote them or move them to a new restaurant," Zhang says.

Despite the change, sales will still impact server pay. Half of the server's take-home pay will come from a $15-per-hour base salary, while the other half will come from a commission based on overall dine-in sales. In addition, the kitchen staff's pay will also be impacted by sales. Back-of-house staff will receive bonuses based on the restaurant's sales, but their extra pay will derive from delivery and take-out as well as dine-in orders.

Dining-in menu prices went up along with the switch to no tipping, with an average 10 to 15 percent increase, while delivery prices stayed the same. Zhang says servers will be making about what they earned before, approximately $25 to $30 per hour. Café China is making less profit with the change so far, which started on March 1, but Zhang says it's worth it. "Now we can build a good management team instead of relying on the owners themselves to do the management duties," he says. And for diners hesitant to change, Café China is offering a free scoop of ice cream "as an apology for taking off Tip option," according to a Facebook coupon.