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NY Post
New York Post
21 Sep 2023


NextImg:Beware of phony restaurant service fees — staff and patrons could be getting screwed: whistleblower

Who do restaurant fees really service?

A former staff member at Automat, a recently shuttered restaurant in California, is warning consumers that paying mandated add-ons — which eateries often claim give their non-tipped teams a more livable wage, or access to better healthcare — might amount to little more than a “facade.”

“If you see a restaurant charging a ‘cost of living,’ ‘equal pay,’ or ‘mandatory service fee’ like the 20 percent this restaurant did, be suspicious,” Jordan Smith said in an Instagram story picked up by Eater San Francisco.

“It’s possible the back of house teams aren’t seeing much of that money,” he added of the non-server crew.

The watchdogging worker sounded the alarm bell as restaurants and patrons alike continue to struggle with the wallet-busting fallout from inflation.

Although NYC restaurants must adhere to a strict surcharge and gratuity code, many other cities and states allow more wiggle room. Random, unregulated bill bump-ups have become increasingly prevalent across the Golden State in recent years.

As more diners struggle to afford the cost of going out, restaurants are increasingly slapping them with nebulous surprise surcharges.
Getty Images/iStockphoto

Pho Ha Noi in nearby Cupertino, for example, caught considerable flack online recently, after an irked customer shared a photo of their bill, which featured a surprise 18% increase — also ostensibly to help workers.

The shady surcharges are so common in Los Angeles that Reddit users recently compiled a list of 200 city restaurants implementing them. One New York patron at City of Angels hotspot Mother Wolf recently griped to The Post about the extra $15 “wellness charge” she paid.

Servers in LA recently filed suit in response to the practice, saying the fees have become a drain on their bottom line, as diners are less likely to leave a generous gratuity after being caught unawares.

Service fees are becoming highly common at restaurants across the nation, such as Pho Ha Noi in Cupertino, CA.

Service fees are becoming highly common at restaurants across the nation, such as Pho Ha Noi in Cupertino, CA.
u/TRTL2k /reddit

“I think [Automat] genuinely thought, ‘We’re on the good team. We’re helping make restaurants a better place.’ But from my experience, it was mostly just a facade,” Smith told Eater.

 “It was supposed to level the playing field,” he added. “It did not make things equal or equitable.”

Automat back-of-house worker Lemuel Ramos also disputed the equity of the service fee in an interview with the outlet.

“We could pay our rent and maybe go buy a nice purchase or go out to a nice dinner every now and then,” Ramos said. “But it still didn’t leave room for disposable income or a good safety net.”

Kitchen workers are warning that service fees meant to boost their wages fall short at the end of the day.

Kitchen workers are warning that service fees meant to boost their wages fall short at the end of the day.
Getty Images

In the case of Upper West Sider Anna Nikkinen, the New Yorker blindsided by her charge at Mother Wolf, she questioned why the burden of funding staff’s higher wage should fall on diners.

“It’s just kind of crazy because it’s not like the food and drinks are cheaper — and we’re still paying for employees’ benefits,” she previously told The Post.