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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