Some restaurants have added new fees to customers’ bills since D.C.’s new minimum wage for tipped workers took effect, but the city’s attorney general says businesses need to do more to clearly explain those fees to their patrons. News4’s Mark Segraves reports.
Some restaurants have added new fees to customers' bills since D.C.'s new minimum wage for tipped workers took effect, but the city's attorney general says businesses need to do more to clearly explain those fees to their patrons.
D.C. Attorney General Brian Schwalb sent out guidelines to restaurants Wednesday on how to adequately disclose fees to customers.
Schwalb issued initial guidance in March explaining what restaurants are required to do to disclose fees. But he said his office has received hundreds of calls about the fees, prompting the additional advisory.
"We, over the last several months, have received hundreds of questions or concerns about restaurant fees," Schwalb said. "Consumers are entitled to know in advance what they're spending their money on and those disclosures, that information needs to be prominently, clearly, understandably displayed before you make a decision on what you're ordering and how much you want to pay."
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Last year, voters passed Initiative 82, which raised the minimum wage for tipped workers to $8 an hour from $5.35 an hour.
To compensate for the added cost, restaurants and bars have added "recovery fees" and service charges. Other restaurants are tacking on processing and packaging fees to carryout orders.
"Implementing this new model, there are going to be some, some wrinkles in the beginning of it, but I think this is a part of that process," said Shawn Townsend, president and CEO of the Restaurant Association of Metropolitan Washington.
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According to Schwalb's guidance, printing "Service charge is included to help support staff" on menus is not enough. Instead, the notice must detail where the service charge is going and how much of it goes to the servers. If none goes to the servers, the disclosure must say the fee is not a tip, he said.
"If diners think that dollars are going to their servers, they may choose to not leave a tip or to leave a smaller tip. And if those dollars are not actually going to the servers, it's an unfair transaction that really hurts the people that are working," Schwalb said.
Townsend said customers should play it safe and ask about fees before they order.
The minimum wage for tipped workers will continue to go up $2 an hour each year until 2027, when it matches the standard minimum wage in D.C.: $17 an hour.
The D.C. Council is considering legislation to put a cap on restaurant fees.
