“Mandatory Gratuity” Banned Unless Restaurants Do This in New York State

In Niagara Falls we were charged an extra surcharge the other day and had to look up what it was and when there was an extra line item. When looking that random charge up, we found out that there are certain surcharges that restaurants are ALLOWED to charge customers,

According to the New York Consumer and Worker Protection guideline, restaurants cannot charge you a mandatory tip UNLESS they do something. Sometimes you would see that in the past if you had a group of over a certain amount that they would add the tip in for you, but that is illegal unless they post it somewhere that you can see and the back of a menu is not acceptable.

Restaurants cannot charge a surcharge or other fee in addition to listed food or beverage prices.

 

Tip: Examples of surcharges or other fees include a 5% living wage fee, 20% administrative charge, or 15% mandatory gratuity. Tip: “Surcharge” does not include tax.

Of course, there is a loophole, though and it is confusing because that rule is right out of the law book.

Followed by that they CAN charge mandatory fees.

Restaurants may charge a bona fide service charge, but only if the charge is conspicuously disclosed to consumers before food is ordered (e.g., on a sandwich board, menu, or sign).

Tip: Examples of bona fide surcharges include a charge to split a single meal on multiple plates; a minimum per person charge; or a mandatory gratuity for parties of eight or more.

Tip: It is a violation to include the disclosure on the back of a menu or hidden in the design of a menu or on a sign that is blocked from public view or in a location where consumers cannot see it.

It is illegal in New York State for restaurants to charge you extra for using a credit card, according to the New York State Erie County Clerk.

Bottom line is, you can be charged surcharges, but they have to be printed in a way that you can see them or communicated ahead of you ordering your food.