The Service Charge on Your Restaurant Check

A line near the bottom of the check: service charge, 18%. It might say wellness fee, kitchen fee, hospitality fee, or staff benefit fee. Two pieces of paper answer the question, and you have both — the menu you ordered from, and the check.

If the menu prices already had the charge inside them, it is lawful. This law does not cap what a restaurant charges, and it does not stop a restaurant from breaking the charge out as its own line on the check. It governs one thing: whether the price you were shown was the real price.

If the charge is an automatic gratuity and the menu disclosed the percentage, it is lawful. “All parties of 8 or more people will incur a 20% automatic gratuity”, printed on the menu, is the fact pattern the legislature wrote a paragraph for. I quote that paragraph below.

A tip you choose to leave is none of this. It is voluntary, the pricing law does not reach it, and Minnesota’s wage law makes a gratuity the server’s money.

The hard case is narrow. The menu priced the food without the charge, the charge went on every check anyway, and somewhere in print the house told you the charge is not a gratuity. That is the one worth your time, and what I say about it is a reading of two statutes — and I can find no Minnesota court decision that decides it.

One date first. This rule reaches conduct on or after January 1, 2025. A 2024 meal is outside it.

The rule, in the statute’s words

Minn. Stat. § 325D.44, subd. 1a(a):

A person engages in a deceptive trade practice when, in the course of business, vocation, or occupation, the person advertises, displays, or offers a price for goods or services that does not include all mandatory fees or surcharges.

A printed menu is a displayed price. So is the menu board over the counter, the menu on the restaurant’s website, the ordering screen, and the menu on a third-party listing. The duty attaches when the number goes in front of you, which is before you order — not at the moment the check lands.

Subdivision 1a(b) says what counts as a mandatory fee: one that “must be paid in order to purchase the goods or services being advertised”, one that “is not reasonably avoidable by the consumer”, or one that “a reasonable person would expect to be included in the purchase of the goods or services being advertised.” The connector is or. A percentage added to every check satisfies the first one by itself.

Sales tax is out, by the statute’s own sentence:

For the purposes of this subdivision, mandatory fee does not include taxes imposed by a government entity on the sale, use, purchase, receipt, or delivery of the goods or services.

Tax on a restaurant bill belongs where it is. A private charge with an official-sounding name is not a tax because the restaurant gave it one.

The date comes from the session law that created the subdivision. Laws 2024, chapter 111, sections 1 and 2 each end with the same clause:

This section is effective January 1, 2025, except that this section is effective June 1, 2025, for industries where the prices are regulated by the Metropolitan Airports Commission.

The paragraph that makes an automatic gratuity lawful

Food and beverage got a paragraph of its own, and it is one sentence:

(h) A food or beverage service establishment, including a hotel, is compliant with this subdivision if, in every offer or advertisement for the purchase of a good or service that includes pricing information, the total price of the good or service being offered or advertised includes a clear and conspicuous disclosure of the percentage of any automatic and mandatory gratuities charged.

Four things in that sentence do work, and you can check every one of them against the menu in your hand.

“[E]very offer or advertisement … that includes pricing information”. Every one. The paper menu, the board, the website, the ordering app. A percentage printed on the paper menu and missing from the website is not cured by the paper menu.

“[T]he percentage”. A number. A service charge will be added is not a percentage. A 20% service charge will be added is.

“[A]utomatic and mandatory”. A blank tip line is not this. A charge that lands on every party of eight or more is automatic and mandatory as to those parties.

“[G]ratuities”. The paragraph shelters the disclosed percentage of an automatic and mandatory gratuity. It does not say service charge, wellness fee, kitchen fee, or administrative fee. That single word is where the hard case lives.

Paragraph (h) also started out broader than it ended up. An earlier version of the bill would have made that one disclosure “deemed compliant with this section” — the whole of section 325D.44. The conference committee that wrote the final text cut it to “this subdivision”. It is a narrow compliance provision, not a restaurant exemption.

If your charge is on a wedding, banquet, or catering contract rather than a menu, the contract version of this question — including what the Attorney General’s office says about contracts signed before January 1, 2025 — is in a separate guide.

What the menu had to say, and where

The Attorney General’s office publishes a five-page FAQ on this law, Frequently Asked Questions About Minnesota’s New Price Transparency Law (Revised 4/2025), and page four of it is a picture of exactly this problem. The office prints three example menus for the same restaurant, two labeled Compliant and one labeled Not Compliant.

The non-compliant one lists a sandwich at $10.00, a salad at $7.50, and soup at $6.75, then adds a footnote: “All orders will incur a 5% health and wellness fee, which helps pay for health insurance for our employees.”

A compliant one lists the same sandwich at $10.50, the salad at $7.88, and the soup at $7.10, under the footnote “All prices include a 5% health and wellness fee, which helps pay for health insurance for our employees.”

Same restaurant, same fee, same money. The difference is whether the number printed next to the sandwich was the number you had to pay. And all three of the office’s menus carry the line “All parties of 8 or more people will incur a 20% automatic gratuity” — the disclosed gratuity percentage is not what makes the third menu fail.

The FAQ states the rule for restaurant fees directly:

If a restaurant charges a mandatory fee, other than an automatic and mandatory gratuity as gratuity is defined elsewhere in Minnesota law, it must be included in the total price advertised, displayed, or offered to consumers by the restaurant.

On a wellness fee specifically, the office says that such a fee, to the extent it “is a mandatory fee as defined under the new law,” “would need to be included in the total price the restaurant advertises, displays, or offers to consumers.” The law does not prohibit the fee itself, “nor does this law prohibit a restaurant from also itemizing the fee, in addition to showing the total price.” And on voluntary tips: “This law does not affect tips or gratuities because they are not mandatory.”

Those are the enforcing office’s positions, quoted from its own published document. They are not court decisions, and a restaurant is free to argue the statute says something else.

The word “gratuity” and the sentence the house prints

Chapter 325D never defines it. Minnesota defines it in the wage law, which is where these charges get decided from the employee’s side. Minn. Stat. § 177.23, subd. 9:

“Gratuities” means monetary contributions received directly or indirectly by an employee from a guest, patron, or customer for services rendered and includes an obligatory charge assessed to customers, guests or patrons which might reasonably be construed by the guest, customer, or patron as being a payment for personal services rendered by an employee and for which no clear and conspicuous notice is given by the employer to the customer, guest, or patron that the charge is not the property of the employee.

Read the back half slowly, because it has two conditions and both have to hold. An obligatory charge is a gratuity where (1) a customer might reasonably read it as payment for personal service, and (2) the employer gave no clear and conspicuous notice that the charge is not the employee’s property.

The Department of Labor and Industry’s rule fills in both halves. A percentage line on the check is the kind of charge the definition is about in the first place: obligatory charges of that sort “include, but are not limited to, service charges, tips, gratuities, and/or surcharges which are included in the statement of charges given to the customer.” Minn. R. 5200.0080, subp. 4a. And subpart 4b says what the notice has to look like:

For purposes of Minnesota Statutes, section 177.23, subdivision 9, clear and conspicuous notice that the obligatory charge is not a gratuity is notice clearly printed, stamped, or written in bold type on the menu, placard, the front of the statement of charges, or other printed material given to the customer. Type which is at least 18 point (one-fourth inch) on the placard, or 9 point (one-eighth inch) or larger on all other notices is clear and conspicuous.

That is why the sentence is on the menu at all. A restaurant that intends to keep a service charge prints it because the wage law tells the restaurant to print it. Print it, and the house owns the money. Print nothing, on a charge a patron would reasonably read as payment for personal service, and the charge is a gratuity by the definition — and Minn. Stat. § 177.24, subd. 3 makes a gratuity “the sole property of the employee.”

Here is my reading, and it is a reading. Paragraph (h) shelters the disclosed percentage of an automatic and mandatory gratuity. A restaurant that printed the bold-type notice has stated in writing, in a size a rule dictates, that this charge is not a gratuity. I read that as putting the charge outside paragraph (h) and back under the ordinary rule — a mandatory fee, which belonged inside the menu price.

Two things cut against me, and you should know both. The wage-law definition is written “for the purposes of sections 177.21 to 177.35” — so it does not reach the pricing statute by its own force; the Attorney General’s office sends readers to it anyway, twice, but that is an agency’s view. And I have found no Minnesota court decision construing paragraph (h). On September 19, 2026 I searched CourtListener’s Minnesota Supreme Court, Minnesota Court of Appeals, federal District of Minnesota and Eighth Circuit opinions for the statute’s citation and for the phrases a decision would have to use — automatic and mandatory gratuities, food or beverage service establishment, mandatory fees or surcharges — and found nothing, while control searches on the same corpus returned results in the dozens. That database does not carry every unpublished Minnesota opinion. It is what has surfaced, not proof that nothing exists.

None of this is about the person who carried your plates. The charge is a pricing decision made by an owner, and where the money goes afterward is a payroll decision made by the same owner. Servers and kitchen staff are on the receiving end of both.

What the law gives a diner, and what it does not

Subdivision 1a sits in Minnesota’s Uniform Deceptive Trade Practices Act. That act’s own remedy is an injunction — a court order telling a business to stop. Minn. Stat. § 325D.45, subd. 1. It is not money, and the fee-shifting in subdivision 2 runs both ways and only on a finding about a party’s state of mind.

A damages claim has to come from a different statute, Minnesota’s Consumer Fraud Act, Minn. Stat. §§ 325F.69 and 325F.70, subd. 3 — which lets an injured consumer “bring a civil action and recover damages, together with costs and disbursements, including costs of investigation and reasonable attorney fees,” for a purchase made “for personal, family, household, or agricultural purposes”. A strong liability rule attached to a weak remedy is an awkward thing, and I walk the whole map — every safe harbor, every exemption, and where the money actually comes from — in Is This Fee Legal in Minnesota?.

The honest arithmetic on one dinner: a 5% charge on a $60 check is $3. Nobody litigates $3, and you should be skeptical of anyone who tells you otherwise. What changes the arithmetic is that a menu is not a one-time decision — it is printed once and shown to everybody.

What to keep

If you want to be able to answer the question later, three things settle it, and two of them disappear within days.

1. A photograph of the menu, the menu board, or the ordering screen as it was that day. Prices change and websites get edited. The menu you ordered from is the document that answers the question; the menu the restaurant prints next month answers nothing.
2. The itemized check or receipt showing the line, its name, and its percentage.
3. Any printed notice about the charge — the sentence at the bottom of the menu, the placard by the door, the line on the front of the check. Photograph it whole, including how it is printed. Under subpart 4b the type itself is part of the question.

What this guide does not decide

Whether a court will read paragraph (h) the way I read it. Whether the particular line on your check is a gratuity under § 177.23, subd. 9 — that turns on what a patron would reasonably have understood and on what the restaurant printed. And nothing here is advice about your bill. It is a reading of statutes.

The longer version of this analysis, written for lawyers and carrying the legislative history in full, is at madgettlaw.com.