Union Square Hospitality Group isn’t a household name nationwide, but it’s the parent company of 13 prominent restaurants in New York City. It was also previously the parent company of burger chain Shake Shack, which has since left the nest as a separate company. Today, USHG announced that they’re going to eliminate tipping in all of their restaurants, instead raising prices to give all employees a raise.

In a blog post/open letter announcing the change, CEO Danny Meyer explains that the decision to get rid of tips everywhere, including coat checks and bars in the company’s restaurants, came from their interest in treating employees fairly. While servers, hosts, and bussers–“front-of-the-house” staff–share in tips, the people who work in the kitchen do not. This leads to a discrepancy, especially at pricier restaurants.

Saru Jayaraman, co-director and co-founder of Restaurant Opportunities Centers United, an advocacy group for industry workers, points out that the federal minimum wage for employees who receive tips hasn’t changed in almost 25 years. “Across the country, tipped workers struggle to make ends meet, as their income is made up almost entirely of customers’ tips rather than a wage from their employers,” Jayarman said, praising the decision.

The first restaurant to ditch tipping is one that the company runs in the Museum of Modern Art, which is called Modern. It has a lot of international visitors, which is important when other countries customarily do not pay their waitstaff largely through tips. and also happens to be the most expensive restaurant in the company’s portfolio.

A LETTER FROM DANNY MEYER [USHG]

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