Restaurant service charge and junk fee compliance

Restaurant industry junk fees have surged in the last several years and have become a focus of state attorneys general:

• Automatic gratuity or service charges added to bills without conspicuous menu disclosure.
• "Kitchen appreciation," "hospitality," "living wage," or "health benefit" fees added at the check.
• Online ordering platforms displaying menu prices that exclude mandatory service or platform fees.
• Delivery platform fees that are described vaguely or appear only at checkout.
• Mandatory fees that read as if they will go to staff (when they do not) or as if they are optional gratuity (when they are not).

California's SB 478 (Honest Pricing Law) generally requires all-in pricing. SB 1524, signed days before SB 478 took effect, created a narrow exception for restaurants, bars, food concessions, grocery stores, and grocery delivery services — but only where the mandatory fee is "clearly and conspicuously displayed, with an explanation of its purpose, on any advertisement, menu, or other display that contains the price of the food or beverage item."

A service charge added to dine-in tabs that is conspicuously disclosed on the menu next to prices is generally permitted. A surprise kitchen-appreciation fee that first appears on the check is not.

Colorado HB 25-1090 (effective January 1, 2026) includes accommodations for food and beverage establishments where mandatory service charges are conspicuously disclosed. Minnesota's total-price-disclosure law (effective January 1, 2025) similarly addresses food service in the broader "reasonable consumer would expect" framing — bills should not contain surprises.

Beyond all-in pricing rules, generic state deceptive-trade-practices statutes have been used by attorneys general in New York, Massachusetts, and elsewhere to challenge surprise fees added at the check.

• List every mandatory service or surcharge on the menu, alongside or near the prices.
• State the purpose of the charge plainly — e.g., "a 4% kitchen appreciation fee, distributed to non-tipped kitchen staff."
• Do not describe a mandatory fee as a "suggested" gratuity or as optional.
• On online menus, ordering platforms, and reservation pages, the same disclosure obligations apply.
• If you advertise a price (in marketing or on a third-party site) that omits the fee, that promotion is likely outside the SB 1524 exception and squarely within SB 478.