Pizza Today -March 2023 - 75

Service Charges
As discussed above, a service charge
is a mandatory charge added to each
customer's bill, usually as a percentage
of the overall bill. This should
always be disclosed in the menu and
as a separate line item on each guest
check to avoid confusion.
The description of the service
charge in the menu should also state
how the service charge is used by
the restaurant, whether it is being
distributed to employees, is being
retained by the restaurant, or a combination
of both. Some states require
that the disclosure statement not be
overbroad or ambiguous or else the
entirety of the service charge must
be given to the employee.
Many pizzerias have replaced tipping
altogether with a mandatory
service charge that is either used to
pay all employees a higher base wage
or is directly distributed to all or
certain employees. Other pizzerias,
like my own, encourage tipping but
also have a small percentage service
fee that is distributed to managerial
employees who perform tipped work
but can no longer accept tips due to
the regulations.
While customers are becoming
more accustomed to mandatory
service charges, they can still be a
point of contention, especially if the
service charge is higher than what
they would ordinarily tip. It can be
nerve wracking for an operator to
add a service fee, just as it is raising
menu prices, but it may be necessary
to stabilize increased wage cost.
While there is no one size fits all
approach to how to handle tips and
service charges, government agencies
are focused on these issues and
are targeting enforcement action on
those who do not comply with the
rules. A well-run pizzeria should
have written records and policies
that can show state and federal
compliance to avoid steep penalties
and fines.
THOMAS REINHARD is a Seattlebased
business attorney and a co-owner of
Cascadia Pizza Co.

http://HOTROCKSOVEN.COM/TIRED

Pizza Today -March 2023

Table of Contents for the Digital Edition of Pizza Today -March 2023

Pizza Today -March 2023 - CT1
Pizza Today -March 2023 - CT2
Pizza Today -March 2023 - Cover1
Pizza Today -March 2023 - Cover2
Pizza Today -March 2023 - 3
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Pizza Today -March 2023 - SG1
Pizza Today -March 2023 - SG2
Pizza Today -March 2023 - SG3
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Pizza Today -March 2023 - SG5
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Pizza Today -March 2023 - Cover3
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