Doing Service Charges (Correctly)

Doing Service Charges (Correctly)

By Paul Schlienz

Restaurateurs have been responding to changes, including higher minimum wages and uncertainty about tip pooling, in a variety of ways. One response is to get rid of tips all together and move over to service charges.

It is important, however, if you’re going to utilize service charges, in your restaurant, that you are aware of all federal and state requirements before embarking on this course.

Federal law defines service charges as a compulsory charge for service. In contrast to service charges, tips allow guests to decide whether to give tips, how much to give and who to give it them to.

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