DC Attorney General Schwalb issues a “Supplemental Business Advisory on restaurants’ legal obligation to adequately disclose all fees – including service fees – to customers.”

Prince Of Petworth August 9, 2023 at 9:35am

From the DC Office of the Attorney General:

“Attorney General Brian L. Schwalb today issued a Supplemental Business Advisory on restaurants’ legal obligation to adequately disclose all fees – including service fees – to customers. Given the recent increase in consumer confusion over restaurants’ fees, the advisory builds on the Office of the Attorney General’s (OAG) previous consumer alerts by including examples of compliant and non-compliant service fee disclosures, as well as illustrative menu disclosures. As with previous guidance, the Advisory is designed to help restaurants comply with the District’s Consumer Protection Procedures Act (CPPA) and help consumers understand their rights.

“Diners are frequently confused by vaguely labeled fees that appear on their restaurant bills and should be able to make fully informed decisions about how to spend their hard-earned money before placing their orders,” said AG Schwalb. “District law requires restaurants to disclose any fees in a timely, prominent, and accurate manner. Today’s guidance, developed in collaboration with industry stakeholders, aims to strike the right balance of supporting DC’s vibrant restaurant culture by further educating restaurants on how to comply with the District’s consumer protection laws while increasing transparency and fairness for patrons.”

“We have always felt that letting guests know about any fees before they order is not just an obligation, it’s also good business,” said RAMW President and CEO Shawn Townsend. “RAMW asked the Attorney General for more specific guidance about services fees, and his office heard us. We appreciate his consideration and responsiveness and look forward to helping make sure this information gets into the hands of our community of restaurateurs.”

“These additional guidelines are a sign of our continuing work with the Attorney General’s Office to support the best environment possible for local diners and international visitors alike,” said Gavin Coleman, RAMW Chair, partner of Long Shot Hospitality, and owner of the The Dubliner Restaurant. “We all have a shared goal of seeing the return of a vibrant hospitality industry.”

“The Attorney General’s examples are especially helpful,” said Diane Gross, RAMW Vice-Chair and owner of Cork Wine Bar and Market. “With these clearer guidelines, restaurant operators have guidance in the language we should use and can get back to focusing on what we love doing, welcoming and serving our guests.”

Restaurants’ additional fees and charges – including service fees – have become increasingly common in recent years, and diners have expressed confusion about these fees. Specifically, diners have expressed confusion about whether restaurants distribute service fees as tips to servers or retain the fees to cover operational expenses (including employees’ base wages) – information that drives consumers’ ordering and tipping decisions.

Under current law, District restaurants are not prohibited from charging service fees or other surcharges, but these fees may violate the CPPA if they are not timely, prominently, and clearly disclosed to diners before they place their orders.

The examples in the Supplemental Business Advisory are for general illustrative purposes only as compliance with the law is determined on a case-by-case basis and depends on the unique facts of each case.

In developing this Advisory, OAG worked closely with, and appreciates the helpful input from, the Restaurant Association of Metropolitan Washington, Councilmember Kenyan McDuffie, Chair of the Committee on Business and Economic Development, and the District’s Department of Licensing and Consumer Protection.

The full Supplemental Business Advisory is available here.

How to Report Illegal or Unfair Business   
To report unfair business practices, scams, or fraud, you can submit a consumer complaint to OAG by: