Why the FTC is coming after restaurant service charges

Working Lunch: The podcast from public affairs firm Align Public Strategies features a discussion on Biden’s “junk fees” proposal and more on the tip credit.

Why is the FTC coming after restaurant service charges?

This week’s episode of Working Lunch, from the public affairs firm Align Public Strategies, features a discussion on the FTC’s effort to regulate hidden fees, which the Biden administration has made a priority.

That effort will include service charges from restaurants and delivery providers, potentially adding a new layer of regulations on a rapidly growing practice within the industry. A lot more restaurants are adding service charges to pay for higher wages, which appears to be inviting federal scrutiny.

One reason service charges are growing: The tip credit appears to be ending. Chicago is killing its tip credit, though an effort to kill the credit was killed in Prince George’s County, Md., a deep blue county. Align’s Joe Kefauver and Franklin Coley discuss the tip credit, service charges and other issues on the podcast, along with Legislative Scorecard.

Check it out.

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