Can a restaurant charge a service charge and not give anything to the servers?
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Can a restaurant charge a service charge and not give anything to the servers?
I work at a fine dinning restaurant that pays a little over minimum. They add a service charge to the bill so the members and guest don’t tip. Is it legal for them to present it as a service charge if the servers never receive it?
Asked on December 20, 2011 under Employment Labor Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
It may constitute a form of consummer fraud or an unconscionable commercial practice if it is not made clear that the service charge is not a tip, since ordinarily, it is. From what you describe, it is actually a surcharge or price increase on the meals masquerading as a tip, and that is what may make it illegal.
If it were fully and properly disclosed, it would be legal--though then, the restaurant would have to pay at least minimum wage and could not claim the "tip credit."
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