A Return to Tipping, But Let Them Be Shared
In 2015 we embarked upon an experiment to move away from tipping in each of our restaurants, beginning with The Modern, and eventually converting each of our Union Square Hospitality Group restaurants over the next several years.
Understanding that eliminating tipping ran counter to every cultural norm American restaurant-goers had come to expect, we nonetheless created a new compensation model called “Hospitality Included,” factoring full liveable wages and benefits for all of our employees into our menu prices. We were determined to make bold strides in fixing an ever-widening wage gap between the dining room (front of house) team and those in the kitchen (back of house). In New York and Washington D.C.—where USHG operates restaurants—it remains illegal for tips to be shared with the kitchen team, and so every time menu prices would increase due to inflation, higher rents, or food costs, only the dining room team saw their income rise while kitchen wages remained somewhat stagnant.
Over the course of nearly five years, Hospitality Included was able to make some strides in narrowing the wage gap, but it was never easy to make the math add up for all stakeholders, even in far more robust economic times. Without appearing onerous to guests, our menu prices needed to cover 100% of our operating costs, including an array of extended employee benefits such as family leave, sick pay, ESL classes, and a 401K matching plan. Dining room compensation would need to be competitive with other restaurants where tipping was the norm, to assure that our dining room team members would be motivated to provide exceptional service and hospitality even in the absence of receiving tips from our guests. Furthermore, guests would need to understand a system that would only allow them to say “thank you” by voice, and not permit them to do so monetarily. And somehow, the equation would need to lead to profitability so that shareholders—who philosophically supported the program—would also see Hospitality Included as a sustainable business model.
During the past four months of enforced city-wide shutdowns, while we’ve been unable to welcome guests into our restaurants, instead providing a limited selection of meals for take-out and delivery, we’ve had ample time to contemplate how our restaurants might best operate when we are one day able to reopen. The only thing we know about the restaurant economy is that no one can possibly know what it will all look like next. When will people feel safe enough to return to restaurants in droves? When will schools reopen, thereby allowing workers to return to offices – an essential predicate for restaurants doing any serious lunch business? When will visitors once again travel to our cities for pleasure and for business? And crucially, will restaurant professionals—already roiled by months of layoffs—decide it’s worth returning to an industry that has already proven its instability in the face of the pandemic?
It’s against that precarious and unpredictable backdrop that we are concluding the chapter on Hospitality Included, and reopening with tips, all the while advocating for policy changes that will introduce much-needed equity into the compensation system. We’ve come to believe that it’s the inability to share tips that is the problem, not the tips themselves. Our ultimate goal is for your tips to be shared among our entire team, so both kitchen and dining room teams can benefit when a guest has a great experience. That will take a shift in public policy and we are actively doing all we can to persuade state and federal lawmakers to make that change. In the interim, we remain committed to maintaining the progress we made in narrowing the wage gap with Hospitality Included. And so while at present your tip can only go to our dining room team, our restaurants will be providing a share of revenue for everyone in the kitchen—from receiver to pot washer to lead cook— and will be increasing total compensation by an average of 25% across our full-service restaurants.
Where do we go from here? While it will take legislative change, our ideal model might look similar to one we’ve seen from the California chef and restaurateur, Jesse Cool, which she calls “Heart of the House.” In California—and several other states—it is legal to share tips among all employees when a full minimum wage, known as “One Fair Wage,” is paid to all workers (as opposed to the tipped minimum wage paid to tipped restaurant employees in states like New York). Heart of the House encourages teamwork among all employees responsible for providing your meal by paying everyone One Fair Wage to begin with, and then allowing you to express your gratitude, which is shareable among all who contributed to your experience.
Over the past five years, I’ve been beyond grateful for the courage and grit that countless USHG professionals have shown in overcoming cultural challenges and ingrained societal norms to implement Hospitality Included, never losing their collective commitment to delivering hospitality to our guests. While we wait to reopen our dining rooms, we remain as committed as ever to seeing our employees fairly compensated and will continue to advocate for laws and business models that allow that to happen. We can’t wait to see you, and in the meantime, wherever you dine, please tip as generously as you’re able.
6.10.2020 - Time to Act
Dear USHG Community,
Over the past months, our primary focus has been to do everything possible to navigate the storm of the Coronavirus pandemic. Confronting the dual health and economic crises has presented a monumental challenge, and yet we are confident that “this too, shall pass.” But bearing witness to yet more gut-wrenching scenes of brutality against unarmed Black Americans has stopped us in our tracks and caused us to consider the myriad of ways in which systemic racism has for too long been an intractable part of our society and perpetuated racial injustice in our workplaces. Without intentional and deliberate change, it will not just go away.
Since the death of George Floyd, we have been connecting deeply and honestly with our families both in our homes and at USHG. We are learning and growing through rich, sometimes uncomfortable conversations, and an abundance of active listening and empathy. Never have we felt prouder of our USHG family, whose courageous voices have demonstrated a concern and love for our company, and for our potential to lead with our hearts, minds, actions, and voices.
Now it’s time to connect with you - our family of guests. And it’s time to act.
I am energized by my responsibility to lead the work and champion the change. To that end, I am sharing with you the actions we’re taking immediately:
- Create a transformative new Diversity, Inclusion, and Bias (DIBS) platform. With grateful acknowledgement for the contributions of those team members who have brought their passion to our D&I Council over the past years, it’s nonetheless clear that what we’ve done to date has not produced nearly enough impactful change to our culture. So we are scrapping existing D&I programs and rebuilding them from scratch. In this post-COVID moment when our current team is just a small fraction of the size it once was, we have a rare and timely opportunity to courageously reimagine our businesses, and reconstitute our teams to reflect our commitment to diversity and inclusion. Engaging with external experts, we are designing a comprehensive new set of best practices that will include but not be limited to: recruiting, hiring, training, sponsorship, career advancement, and compensation. We are also holding ourselves accountable for defining and reaching diversity goals in how we select our suppliers.
- Listen, learn, process, act. We will continue to collect, study and share anti-racism resources both internally and externally to further our collective education. We will continue to foster an open dialogue with our staff in group forums and one-on-one conversations. We will use our digital platforms to share stories from Black voices in the restaurant industry and our broader community of suppliers. We also want to engage with you, and invite you to share your thoughts and suggestions with us at firstname.lastname@example.org.
- Set expectations and hold each other accountable. To truly change our culture, every single USHG employee needs to actively champion anti-racist behaviors. We will set clear expectations as we rebuild our team and create a system to hold ourselves and each other accountable. We will ask for the same commitment from our entire community of stakeholders.
- Raise funds for change. We are excited to be reopening the kitchens of some of our restaurants in the coming weeks with reimagined menus. Unfortunately, it is still too soon to welcome you back into our dining rooms, but we are ready to safely serve you through contactless takeout and delivery options. Each USHG restaurant will donate 100% of the sales from its first week back in business either to the Equal Justice Initiative or another organization individually selected by the restaurant team doing the work they feel is most important. Next week we will also be launching an online auction of USHG experiences directing 100% of the funds raised to organizations fighting for justice.
As Union Square Cafe, Marta, Tacocina, Blue Smoke, and Daily Provisions each begin to serve guests, I am energized by the opportunity we have to build a more equitable culture at USHG. Our team is so excited to welcome you home to our restaurants, and even if you can’t see the smiles behind our masks, they are wide and brimming with pride and hope.
Union Square Hospitality Group stands in solidarity with our Black colleagues, friends, family, and communities of color. We know that confronting systemic racism requires far more than a pledge, writing a check, or issuing a statement. This is a start, and with daily action, understanding, and love, we will make sustained progress together. Black lives matter.
Please join us on this journey.
With respect and gratitude,
6.4.2020 - Black Lives Matter Resources
We’re collecting resources and continuing to educate ourselves and our teams and we are looking for input, feedback and ideas. Please find the latest list of resources here. This is a living document; if you have other resources that should be included here, please email us at email@example.com.
6.2.2020 - A letter from Danny Meyer to our USHG Team
Dear USHG Family,
For the past 11 weeks, our primary focus has been to do everything possible to navigate through the Coronavirus pandemic. But this week we bear an even deeper weight as we’ve witnessed the horror of yet more gut-wrenching scenes of brutality against unarmed black Americans.
Unlike the pandemic, I’m not willing or able to say that “this too, shall pass.” These are scenes we’ve all seen too many times, and this time it has led to a nationwide uproar against the institutionalized racism that has shown its face in our society for far too long. Watching the news has once again made me feel angry and deeply saddened. I admit, at times I’ve even been pessimistic about how we can make a positive difference. As I’ve tried to write and rewrite this letter over the past days, I’ve often felt frozen. What I want to convey more than anything is that I too am hurting, and share your pain.
What I see today is that while each one of us cannot do everything to bring about constructive dialogue and change in our country, each of us must nonetheless do all that we can. We must each understand when it is our turn to learn and when it is our time to teach. Today I am a learner.
I understand that the protests across our entire country represent a pent up collective cry that enough is enough. They are a condemnation of the systemic racism and bias in our country that have plagued far too many of our citizens, and they are happening because so many of us expect and yearn for far better from America. For black lives to matter, it will take each of us—especially those of us with white faces who were born into imbalanced privileges—to speak up. As Dr. Martin Luther King, Jr., wrote in his Letter from Birmingham Jail, “Whatever affects one directly, affects all indirectly.”
It is time to conduct constructive dialogue—internally and externally—to illuminate the injustices that have stacked the deck against too many Americans. Some of those conversations will be uncomfortable, and they’ll need to be if we intend to use this moment to embark upon a new path.
I am proud of the work that our Diversity & Inclusion Council has done to create a safe space for education and dialogue. But that work can no longer be the priority of a select group. All of us at USHG, beginning with me, must do much more than we’ve done to date. I am confident that our work together will make each of us an agent of change for one another, our company, and maybe even our industry.
With humility, I know that there is so much more commitment needed to pull back the layers of institutional racism that have brought pain and injustice to so many, and that have disadvantaged people of color. On this Thursday’s all-company “Chat with Chip” call, both Chip and I ask you to bring your voices, hopes, and ideas. We are here to listen and stand with you. If you’d prefer to have an individual conversation, please email me, Chip, or Patti directly.
As a company built on the foundation that hospitality is about being on one another’s side, it is even more crucial now for us to support and stand with each other.
If not now, when?
Estimados familia de USHG,
Durante las últimas 11 semanas nuestro enfoque principal ha sido hacer todo lo posible para navegar a través de la pandemia de coronavirus. Pero esta semana soportamos un peso aún más profundo, ya que hemos sido testigos del horror de escenas de brutalidad contra los estadounidenses negros desarmados.
A diferencia de la pandemia, no estoy dispuesto o puedo decir que "esto también, pasará". Estas son escenas que todos hemos visto demasiadas veces, y esta vez ha llevado a un estruendo nacional contra el racismo institucionalizado que ha mostrado su rostro en nuestra sociedad durante demasiado tiempo. Ver las noticias me ha hecho sentir enojado y profundamente entristecido. Admito que a veces incluso he sido pesimista sobre cómo podemos hacer una diferencia positiva. Como he tratado de escribir y reescribir esta carta en los últimos días, a menudo me he sentido congelado. Lo que quiero transmitir más que nada es que yo también estoy lastimando, y comparto con tu dolor.
Lo que veo hoy es que, si bien cada uno de nosotros no puede hacer todo lo posible para lograr un diálogo constructivo y un cambio en nuestro país, cada uno de nosotros debe, sin embargo, hacer todo lo que podamos. Cada uno de nosotros debe entender cuándo es nuestro turno de aprender y cuándo es nuestro momento de enseñar. Hoy soy un aprendiz.
Entiendo que las protestas en todo nuestro país representan un grito colectivo que dice ya es suficiente. Son una condena del racismo y el sesgo sistémicos en nuestro país que han plagado a demasiados de nuestros ciudadanos, y están sucediendo porque muchos de nosotros esperamos y anhelamos mucho mejor de Estados Unidos. Para que las vidas negras importan, nos llevará a cada uno de nosotros, especialmente a aquellos de nosotros con rostros blancos que nacimos en privilegios desequilibrados, alzar la voz. Como escribió el Dr. Martin Luther King, Jr., en su Carta de la cárcel de Birmingham, "Lo que afecta a uno directamente, afecta a todos indirectamente".
Es hora de conducir un diálogo constructivo —interna y externamente— para iluminar las injusticias que han apilado contra demasiados estadounidenses. Algunas de esas conversaciones serán incómodas, y tendrán que serlo si tenemos la intención de utilizar este momento para emprender un nuevo camino.
Estoy orgulloso del trabajo que nuestro Consejo de Diversidad e Inclusión ha realizado para crear un espacio seguro para la educación y el diálogo. Pero ese trabajo ya no puede ser la prioridad de un grupo selecto. Todos nosotros en USHG, empezando por mí, debemos hacer mucho más de lo que hemos hecho hasta la fecha. Estoy seguro de que nuestro trabajo en conjunto hará de cada uno de nosotros un agente de cambio el uno para el otro, nuestra empresa, y tal vez incluso nuestra industria.
Con humildad, sé que hay mucho más compromiso necesario para retirar las capas de racismo institucional que han traído dolor e injusticia a tantos, y que tienen personas de color desfavorecidas. En la llamada de la compañía de este jueves "Chat con Chip", tanto Chip como yo les pedimos que traigan sus voces, esperanzas e ideas. Estamos aquí para escuchar y estar con usted. Si prefiere tener una conversación individual, por favor envíeme un correo electrónico, Chip o Patti directamente.
Como empresa construida sobre la base de que la hospitalidad se trata de estar del lado del otro, es aún más crucial ahora que nos apoyemos y nos pongamos de pie unos con otros.
Si no ahora, ¿cuándo?
5.22.20 - Daily Provisions Union Square Opens
Daily Provisions Union Square opens for pickup every Wednesday through Sunday from 9am. Order ahead for coffee, crullers, and egg sandwiches. Stay tuned to @dailyprov for updates from our Upper West Side location and additional offerings.
Our top priority is the safety and well-being of our team members, our guests, and each and every member of our community. To keep all of us safe, we have implemented new health and safety protocols that go above and beyond our already strict standards. Learn more.
5.3.2020 - USHG HUGS Friends and Family Online Auction
Thanks to our community’s generosity, the inaugural USHG HUGS online auction featuring USHG experiences raised enough money to award over 300 grants to our employees facing extraordinary financial needs.
On Monday, May 4, we launched a new online auction featuring contributions from our friends & family. This community of supporters has pulled together a list of incredible items and experiences, including items and experiences from food legend Ina Garten tot New York City creatives Dapper Dan and Eva Chen, and exciting memorabilia and experiences for sports fans (did someone say the New York Islanders and Stan Smith?). We’re also kicking off our Series that will include shipments of specialty foods paired with virtual cooking classes with our chefs – 100% of the funds from those items will go directly to those suppliers.
Thank you for your ongoing support, and get bidding: ushg.link/auction
- The USHG Team
4.10.2020 - USHG HUGS Silent Auction
We’ve launched an online auction benefiting our USHG HUGS employee relief fund including items generously donated by friends of USHG and from across our family of restaurants. From dinner with Danny Meyer at Union Square Cafe (turning 35 this year!) to a private Shake Shack truck for a day, our online auction includes items generously donated by friends of USHG and from across our family of restaurants.
Bidding ends Tuesday, April 14 at 11:59 pm. Thank you so much for your continued support. We can’t wait to welcome you back soon!
- The USHG Team
3.27.20 - USHG HUGS Employee Relief Fund
At Union Square Hospitality Group, our guiding principle of Enlightened Hospitality is a virtuous cycle that begins with our valued team members. Our people are at the core of what we do and if they should encounter unforeseen hardship, we want to be able to lend a helping hand both in this public health crisis and beyond with the USHG HUGS Employee Relief Fund. Current USHG employees in good standing can apply for a grant using this form.
We are grateful to everyone who helped contribute to the fund through our gift card campaign and we welcome donations to USHG HUGS via PayPal at ushg.link/donation or by wire transfer by emailing us at firstname.lastname@example.org.
- The USHG Team
3.18.20 - Statement from Danny Meyer
In the 35-year history of Union Square Hospitality Group, this is, without a doubt, the most challenging period any of us has ever encountered as leaders. Reconciling who we are as a people-first company with this brutal moment is nearly impossible.
We’ve successfully led through and weathered 9/11 and the financial crisis of 2008, but at no other point has there been such a sustained and massive dual threat to both the physical safety and economic livelihoods of our people, or the hospitality industry as a whole. We’ve always endeavored to put our people first, and so to conduct such a massive layoff of our cherished colleagues today leaves me gutted. Never could I have fathomed a time where the only path forward would be to lay people off so they can receive unemployment, while this company fights to see another day when we can return to our full staffing levels.
I said to my team last week that this is a time requiring both reality and hope, and today that is truer than ever. The reality is that we’ve had to make drastic and previously unimaginable choices for how we conduct business just to protect our team and our communities. The reality is that in doing so, our revenues have been decimated, and the foundation of our business has been seriously tested. In the absence of income, restaurants simply cannot pay our non-working team members for more than a short period of time without becoming insolvent. In that scenario, no one wins.
We have created a relief fund to help the employees affected by the layoffs today. To seed the effort, I’m immediately contributing my entire compensation, and our executive team is taking a meaningful pay cut. We will use these funds and other donations we collect to help those on our team that will face significant financial hardship in the weeks to come. Through March 24, 100% of the revenue generated by USHG gift cards purchased on our site will be directed toward that fund. We ask that friends of USHG restaurants join us in this effort.
However, we cannot depend simply on the generosity of our community alone. If ever there were a time to call on the government to provide enlightened leadership, it is now. Our employees need that support to sustain their livelihoods while waiting for our restaurants to reopen. I am calling on our city, state, and federal leadership to step in with a full emergency relief package for restaurant and bar workers, and I pledge my immediate service—on behalf of, and along with other industry leaders—to help come up with economic solutions that work for all. Our industry is both a significant employer and contributor to the fabric of life in New York.
There remains hope. Hope that this virus will be defeated. Hope that with the help of our government, we can find a way to create meaningful economic safeguards for all hospitality employees who have been forced out of their work. Hope that before too long, they will safely be able to come back to work alongside the people they love and to serve the public who love our restaurants. Hope that this industry itself will still be standing. Hope that the challenging steps we’re taking today will allow us to get back together, delighting our guests, investing in our communities, and buying products from our suppliers as soon as possible. My team and I are working diligently - using our heads and our hearts - to find every possible solution to this set of challenges. We cannot wait to bring our team back home to work. My video message to our team here.
Danny Meyer • CEO
3.17.2020 - Employee Relief Fund
With the uncertain times ahead, we’re setting up an Employee Relief Fund to support team member affected by this public health crisis.
We’ve been overwhelmed by the love we’ve received from you in the past few days, and you’ve asked us how you can help. Therefore, now through March 24, when you purchase a gift card here, 100% of gift card sales will go toward the Employee Relief Fund. All gift cards purchases can be redeemed at any one of our restaurants, bars and cafés in NYC and Washington, D.C.
We cannot thank our community enough, and we hope we can make a date for you to visit us soon!
- The USHG team
3.13.2020 - We Already Miss You
Dear USHG Community,
We are all navigating uncharted territory with no preexisting roadmap or compass except for how we do business: nothing matters more than the safety and health of our team members, guests, and communities.
With all that we now know about federal, state, and city-wide mandates, as well as the science that has provided evidence urging everyone to reduce non-essential social contact, we have made the difficult decision to temporarily close our restaurants until we believe it is safe to re-open.
Of course, we SO wish we could do business as usual, keeping all of our people working and offering the comfort of our cooking and hospitality to our guests. But it’s unequivocally necessary and responsible that we do our part to keep everyone safe. For those of us who find purpose and passion in bringing people together, we must confront the reality that togetherness may be a threat to the health and safety of our community at this time.
We will use this temporary period of closure to explore how we can best support the livelihoods of our employees and our broader hospitality community until the situation normalizes. Already, we have made several commitments to our employees. Despite our closures and the total loss of our revenues, we will continue to pay employees scheduled to work through the pay-week. We will cover employee premium contributions for medical insurance for those who are currently enrolled, for the next month. We will continue to cover costs associated with the evaluation, diagnosis, and treatment of coronavirus for any colleagues who don’t have health insurance. Finally, we are providing free mental health support for employees who need help.
People are the heart of the hospitality industry, and our closures will present our businesses (and our entire industry) with serious financial challenges. If you wish to help people whose livelihoods are directly impacted by lost shifts, now is the time. You can buy a gift card to your favorite restaurant, to use when the situation normalizes. You can patronize delivery and takeout offerings from restaurants that have remained open. You can donate to organizations like City Harvest and Share Our Strength who are working hard to feed those for whom lost jobs and school closures have created an urgent need for feeding.
This story will end at some point and while we have no idea when that will be, we are relying upon today’s difficult decisions and collective sacrifices to put our company and our businesses in the strongest possible position to pick up where we left off as cherished places for people to be together and to receive our brand of hospitality.
We will continue to lead with our hearts and minds, and cannot wait to welcome you home to our places as soon as this is all behind us.
Danny Meyer • CEO
3.13.2020 - Temporary Closure
To our Guests and our Community,
We have made the difficult decision to temporarily close for service to prioritize the health and safety of our team, our guests, and our community. While we are fueled by the opportunity to welcome you with warm hospitality, we believe that closing is in the best interest of public health at this time.
This is new territory for all of us, and we are making decisions with both our hearts and our minds. We are learning new information daily, and as we continue to evaluate the best path forward, we will post the latest updates here.
We wish we could have served you today, and we will miss seeing you in the coming days. We can’t wait to welcome you back as soon as we can.
The Union Square Hospitality Group Team