Florida Requires Restaurants to Disclose Fees Before Ordering Starting July 1

Q: Florida's law discloses service fees, but who ultimately pockets the money from these mandatory charges?

The money from Florida restaurants’ mandatory service charges and other “operations charges” legally goes to the business, not automatically to servers or other staff. Under the new law, restaurants must tell customers in advance what the charge is and what it is for, but the law does not require that the money be passed through to employees. A mandatory service charge is treated differently from a voluntary tip: it is business revenue. That means the restaurant can keep it, use it for operating costs such as labor, benefits, delivery expenses or credit card fees, or distribute some or all of it to workers as wages. That distinction matters. Voluntary tips generally belong to employees. Mandatory charges do not. If a restaurant gives that money to staff, it is paid as wages and must follow wage-and-hour rules; it is not the same as a tip and cannot simply be treated as part of a tip pool. In practice, where the money ends up depends on the restaurant’s policy and disclosures. Some operators, such as BOL Hospitality Group, say their service charge will go entirely to employees. Others may use part of the charge for broader business expenses. Industry lawyers and operators say the key issue is clarity: if any portion is not going to staff, customers should be told that plainly. So the short answer is that the restaurant pockets the charge first, and then decides whether to retain it or pay it out to employees.

3 articles · Updated · Fox News · Jul 1

July 1 brings a new Florida rule requiring restaurants to tell diners about any mandatory service charges, automatic gratuities and other non-tax fees before orders are placed.
The law expands prior disclosure rules to cover broader “operations charges” — including credit-card surcharges and delivery fees — and requires the amount or percentage and purpose to appear on menus, websites, mobile apps, contracts and final bills.
Restaurant operators broadly backed the transparency push, though they differed on fee structures: one South Florida group plans an 18% service charge at a restaurant and said customers should know whether any share goes to operations rather than staff.
Some owners still prefer folding costs into menu prices instead of adding fees, arguing that clearer upfront pricing avoids confusion over tipping and surprise charges as restaurants face rising costs.