DennisBeaverNovember 04, 2006 (Original publish date) • By Dennis Beaver

I have a complaint about a restaurant I visited with a group of friends. It had been a delightful small Italian restaurant in a strip mall with about 10 tables, a friendly staff who took the time to talk with patrons, and the food was excellent. But when we went there again recently, things were very different. They only seemed to have two servers for a packed house, including space recently opened up next door which doubled the size of the place. What really bothered us was an 18 percent service fee added onto the bill for only five people!

I read the menu carefully and there was nothing about a “service charge.” The waitress never said a thing until after giving us the check. Not wanting to make a scene, the entire bill was paid. I do not mind leaving a tip for good service, and understand such fees for large groups or banquets, but five people? I phoned the restaurant and spoke with someone who was not very nice and said, basically, so what if it isn’t on the menu! Can this be legal? Oh, by way, the restaurant is in your town, Mr. Beaver. Would you check this out for yourself, as I want to be sure I am correct. Thanks, Chad, a longtime Hanford reader.

Menu = contract

We did check out my reader’s complaint. Chad was right about this small Italian restaurant in the southwest part of Bakersfield, not far from Cal State University. At one time, in my opinion, for a city like ours, it was a great little restaurant. Of course, opinions about restaurants are varied, and reasonable people may differ. But, what had been a delightful, neighborhood restaurant on our every visit in the past, with very nice servers, seemed transformed into something I could hardly recognize.

Apparently its success – it was so popular that reservations were a must – led to the owner literally doubling the size, spreading out to the office space available next door. And, like Chad, I saw for myself inept, unpleasant servers (I only counted two) run around hurriedly, waiting on far too many tables. The attitude was nothing short of, “Eat and get out.”

Is this legal? In my opinion, not at all. Is it proper?

“Absolutely not,” according to someone who should know, and that’s Paul Paz, Oregon based former president of the National Waiters Association, and a nationally recognized expert in the hospitality industry. He knows what it takes to operate, manage and staff a first class restaurant. For an inside look into the reality and challenges in working in the hospitality industry visit his Web site www/WaiterWorld.com

To Paul, being in the hospitality field is “much more than a job. It’s an honor, really, and a joy, to help people enjoy an evening out with friends and family. This is a field where we are witness to all that humanity reveals while breaking bread,” this waiter/sociologist/psychologist commented. Here’s how he analyzed this situation.

“What you and your reader have described is a recipe for a meal that, no matter how well prepared, will still leave a bad taste. It isn’t right and someone needs to get that owner’s attention if he cares to do business the right way and if this restaurant is to survive.”

“Dining customers must be informed in advance that a service charge will automatically be applied to their bill. It can be done verbally when making a reservation or when being seated or accomplished by having it written on the menu, or a table display explaining the house policy regarding service charges. Unless properly brought to the attention of the customer, the restaurant is not entitled to be paid,” he maintains.

“Unlike Europe, where 15 percent is added across the board, in the United States, we do not have that custom, and the patron is free to leave a tip as a recognition for good service. Restaurants that add these fees often lose business, and especially when the customers discover that the money does not have to go to the staff! If you see language such as Service Charge of X percent included in the bill, that money can, legally, go to the owner of the restaurant,” he pointed out.

This issue is addressed on the California Division of Labor Standards Web site: “A tip or gratuity is a voluntary amount left by the patron. A mandatory service charge is a contractual agreement – such as 10 or 15 percent added to the cost of a banquet – and is owed to the establishment, and distributing that money is left to the discretion of the owner.”

But to add insult to injury, if the restaurant calculates that service charge correctly, you are going to wind up paying far more than the stated percentage. The California Board of Equalization, like good Boy Scouts, always “Ready” (to find ways of taxing us) make it clear that “An optional tip or gratuity is not subject to being taxed on the customer’s bill. However, a mandatory tip, gratuity or service charge is included in gross sales receipts and is taxable to the customer.”

Of great interest to me is the example the Board chooses to illustrate this mentally taxing issue: “A 15 percent gratuity (or service charge) will be added to parties of eight or more.”

Notice they didn’t say 6, and they didn’t say 5. It was an example, but one based on common experience. To add this “service charge” for only five people, “seems to be really unfair to the patron. And plain greedy of an owner.” Paul concluded.

What did the owner say?

I phoned the restaurant and spoke with someone who claimed to be the owner, explained why I was calling, told him that a reader had been there, was charged a service fee for his group of five, and that he was not informed in advance and it was not stated on the menu.

“Do you have a service charge for groups of five or more?” He admitted they do. “Is it printed on the menu, or somewhere in the restaurant?” “No it is not.” “Most restaurants have such a fee for larger parties, why do you charge this for only five people?” “Because we do!” “How does the guest know of the charge?” “Waitresses tell them.” “And what if the waitress does not?” “They pay anyway.”

“Could you please tell me why you do not print this in the menu and the justification for a service charge of 18 percent for just five people?” I asked.

“Is this a joke???” was his answer, “IS THIS A JOKE???” he repeated and then hung up.

Chad, my Hanford reader felt that it was much more than an 18 percent service fee. “Sometimes we even tip 20 percent, so that wasn’t the real issue. It was such a nice place, and when we came down to your city, really looked forward to going there. I don’t feel that way anymore, and it’s plain sad,” he said.

So, Mr. Restaurant Owner, you tell me, was it worth it?


Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.



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