18% Service Charge At a Restaurant in Los Angeles
The restaurant scene has been changing, and one of the most noticeable shifts is the addition of service charges to the bill. Once a rare occurrence, service charges are now becoming more common in restaurants across the country. But what exactly are these charges, and why are they being implemented? Here’s a closer look at the growing trend.
What Are Service Charges?
Service charges are additional fees added to the bill at the end of a meal. Unlike tips, which are voluntary and go directly to the wait staff, service charges belong to the employer, who can choose how to spend it. These charges can range up to 22 percent or more and are meant to help restaurants deal with challenges such as inflation, labor shortages, and the expectation of better wages and benefits for workers.
Why Are They Becoming More Common?
The restaurant industry has long operated on slim profit margins. With the added pressures of the pandemic, rising food costs, and mandates for higher minimum wages, many restaurants are turning to service charges as a solution. This allows them to pay their workers more without significantly raising menu prices.
The Confusion Surrounding Service Charges
Despite the growing prevalence of service charges, there is still a great deal of confusion among both customers and employees. Many diners conflate service charges with tips and are unsure whether they should leave additional money. The lack of clarity and consistency in how these charges are implemented and communicated has led to frustration.
For example, some restaurants still encourage guests to tip even after adding a service charge, while others include the charge in the pricing of dishes. The word “service” itself can lead diners to associate the charge with the quality of their experience, adding to the confusion.