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CA RESTAURANTS: NO SERVICE CHARGES




If you own a restaurant/bar in California, please read on..


It's official:  effective July 1, service charges at most California based businesses will no longer be allowed.  This includes hotels,  car rental agencies and restaurants.  Additional service charges and large party auto gratuities are no longer allowed to be added to a guest ticket.  See attached FAQ from California's Attorney General (AG) for details.


SERVICE CHARGES............. Charges like "Healthy SF," and charges that "are added cover additional labor expenses" and any other charges can't be added to the guest ticket.  Instead, menu prices will need adjustment. Price hikes , IMO, should be more than the lost service charge rate:  for example, if you currently add a 5% Healthy SF surcharge, consider a 6-7% across the board menu price adjustment.  


DELIVERY CHARGES......... This is an exception to the new rule:  delivery charges CAN be added.  


LARGE PARTY AUTO GRATUITIES.......... Can't be added to the guest ticket:  instead, guests will be relied upon to leave a proper voluntary tip.


PRIVATE EVENTS............ Service charges and auto gratuities CAN  be added to any contracted private event.


If you have questions or need help running models on new menu pricing, let me know.

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