Tagged-on Tipping above 15% illegal

[Peter B Wolf]

NYC prohibits built-in restaurant tips over 15 percent

As the economy sours, more New York restaurants are tacking on unfair service charges including built-in tips as high as 20 percent, the Post reported this weekend.

The Department of Consumer Affairs today confirmed to NewYorkology that restaurants are allowed to tack on a mandatory service fee or tip only if they meet several city rules:

The fee must be listed on the menu in 10-point type or larger.

The fee can only apply to groups of 8 or more.

The fee cannot exceed 15 percent.

Charges for two persons splitting one meal, or a per-person minimum charge are allowed as long as the fee is conspicuously disclosed to the consumer before the food is ordered.

“New Yorkers should never be surprised about a charge when they get their restaurant bill,” Consumer Affairs Commissioner Jonathan Mintz said in a statement sent to NewYorkology. “Charging mandatory gratuities on parties with less than eight people is illegal. Consumers should call 311 to report these illegal activities.”

If you realize your bill is wrong you can complain to the restaurant to remove the charge, call 311 to anonymously ask for an inspection of the restaurant, or if you have the time and your receipt, you can file a complaint with the Department of Consumer Affairs which will try to get you a refund of the unfair service charge.

found here

http://www.newyorkology.com/archives/foodology/index.php

[Peter B Wolf]

NYC prohibits built-in restaurant tips over 15 percent

As the economy sours, more New York restaurants are tacking on unfair service charges including built-in tips as high as 20 percent, the Post reported this weekend.

The Department of Consumer Affairs today confirmed to NewYorkology that restaurants are allowed to tack on a mandatory service fee or tip only if they meet several city rules:

The fee must be listed on the menu in 10-point type or larger.

The fee can only apply to groups of 8 or more.

The fee cannot exceed 15 percent.

Charges for two persons splitting one meal, or a per-person minimum charge are allowed as long as the fee is conspicuously disclosed to the consumer before the food is ordered.

“New Yorkers should never be surprised about a charge when they get their restaurant bill,” Consumer Affairs Commissioner Jonathan Mintz said in a statement sent to NewYorkology. “Charging mandatory gratuities on parties with less than eight people is illegal. Consumers should call 311 to report these illegal activities.”

If you realize your bill is wrong you can complain to the restaurant to remove the charge, call 311 to anonymously ask for an inspection of the restaurant, or if you have the time and your receipt, you can file a complaint with the Department of Consumer Affairs which will try to get you a refund of the unfair service charge.

found here

http://www.newyorkology.com/archives/foodology/index.php

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Got a legal question here.

It's about terminology.

What is the difference, when printed on a restaurant menu, between "Service Charge" and "Gratuity" ? (the word "TIP" is seldom printed)

Some time ago I was told that a Service Charge added to a bill does not need to be payed out by an establishment to servers when a credit card is used.

Whereas a Gratuity must be paid to servers.

Mr. Shaw, you know the law ?? !!

[Pan]

I disagree with this action. Service fees are standard and work very well in countries like France and Italy, and I think the regulation should set 20% as the top amount. I'd speculate that many diners, upon seeing a service charge of 15%, would conclude that the restaurant doesn't want a higher-percentage tip, and that could end up decreasing tip receipts for the waitstaff. More importantly, the requirement that service charges be imposed only on groups larger than 7 is ludicrous. I suppose Per Se will have to revamp its billing now.

[docsconz]

I would think that if service is included in the meal charge as it is at Per Se, they could make it whatever they want so long as the cost of the meal is apparent at the outset.

The reason why service charges are allowed for large groups is because they are otherwise more likely to skip out without leaving an adequate gratuity on their own. I do not agree that any mandatory service charge should be more than 15%, however, good service should be rewarded beyond 15%.

[Calw]

First, I have no issue with the large group charge - it is extra work and many groups (or individuals) don't own up to what a fair tip is - we all know the cheap scape who "only had soup and water" and does not even put in enough for that (don't forget the tax & tip is there too!), but it happens on a large scale too.

The problem with tipping rules is that there aren't any - the reference to Italy & France will get you into trouble when you go to Asia or Australia - where (this happened in front of me - to my shock as an American) my host (who was not cheap on any other occasion) reduced the bill because service was very poor. There are too many other cultures of tipping out there to say this is the one.

Seems to me there are 2 counter pressures here. First, we've become tip happy - or mad, as a culture. I'll leave behind for now that everywhere I go there is a tip jar - (can't wait to see one at the grocery store for my self bag & check-out line). Second, the issue of whether a living wage can be earned should not fall to the diner but the restaurant industry. Look, menu prices are up and as a result 15% is of a higher number. But the restaurants are dealing with the base price and not the labor component in their pricing.

Seem that the idea of a gratuity has lost its meaning, it is supposed to be that - a gesture of thanks for good service. I have no problem giving 15% right off for even adequate service, but places that demand 20 (like the NPR show recently) is getting out of hand. Restaurants should pay their people properly, but we as diners should have the decency - especially now - that is is really hard to make a living in this career to be more generous. I am upping my tips to 20% - especially now because there are fewer people dining out. but I don't feel that when the economy turns I have to keep it there.

[deprofundis]

I don't know that Per Se necessarily has to change because they don't list a price for the meal and then add a surcharge. You are only given the one price, in which it says service is included.

[docsconz]

I don't know that Per Se necessarily has to change because they don't list a price for the meal and then add a surcharge.  You are only given the one price, in which it says service is included.

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i agree. That makes a big difference.