We opened a restaurant with a no-tipping policy. We have to charge more, but it's been totally worth it.

• Vinod Kalathil and his wife recently opened the restaurant Thattu in Chicago.
• The restaurant doesn't take tips but instead pays servers a competitive wage.

This is an as-told-to based on a conversation with Vinod Kalathil, the owner of Thattu, a no-tip restaurant in Chicago. This conversation has been condensed and edited for clarity.

My wife and I opened our restaurant, Thattu, about four months ago on the Northwest side of Chicago. We serve food from Kerala, a state in southern India where I'm from.

We don't charge our customers a service fee or expect them to leave tips. So, our prices are about 15 to 20% higher than they'd be if we were adding those charges onto the bill.

Before we opened, we talked to other restaurant owners about plans for opening a "no-tip" restaurant. The standard response we got from all of them was that it wouldn't work. Customers would balk at our prices, they said. I say the prices reflect the true cost of dining out.

And part of the cost of dining at Thattu goes to helping our wait staff earn a consistent and competitive wage. We pay them about $19 an hour. On top of that, we distribute about 8% of all our sales — whether they're from the restaurant, the bar, any catering we do, or our small retail section — between all of our employees. So our waiters take home between $24 or $25 an hour on average.

Labor makes up more than half of our total costs and that's how we planned it.

We actually opened the first iteration of Thattu back in 2019 in a food hall in Politan Row. It was a busy time. My wife and I were working close to 14 hours a day, seven days a week, until the pandemic hit 10 months later, and we had to close.

So, we began doing pop-ups every month or so for the next two years. With some pop-ups, customers would pay for the order online, and come pick it up from us. During other pop-ups, customers would pay using a card reader from Square.

These readers have suggested tip amounts. We noticed that when a server was standing in front of a customer with a handheld device, they seemed to feel a lot of pressure to tip. It's a little confrontational to put something in front of them – there's a lot of friction there.

So, another reason we decided to eliminate tips was because we wanted to avoid these interactions with customers.

At Thattu, some people still insist on leaving tips. They'll come to the bar, hand us cash, and say "Hey you guys did a really great job." So tips are really an expression of customer goodwill rather than income our wait staff is relying on.

We asked our employees what they wanted to do with these cash tips. We decided that we would use it to buy coffee, and pop, and beer for the employees. Sometimes we use it to buy ice cream for everyone. A couple of weeks ago we even had a group outing.

Now, the city of Chicago is rethinking how we pay tipped workers, too, through a new policy that could ensure them a more consistent income.

Honestly, I think that's how it should be.

Right now, tipped workers in Chicago receive what's called a subminimum wage of $9 to $9.48 depending on how many employees there are at the establishment. If a tipped worker's wages plus tips do not equal at least the full minimum wage — $15 for an employer with 4 to 20 workers, and $15.80 for those with more than 21 workers according to the City of Chicago — the employer must make up the difference.

In July, the city introduced a new ordinance that will guarantee these workers a $15.80 minimum wage plus any tips they receive on top of that, according to Block Club Chicago. If the ordinance passes through the city council businesses will be required to meet the new wage guidelines by July 2025, Block Club reported.