Can Restaurants Actually Force Gratuity?

If you've ever gone to a restaurant, particularly in a larger group — say, six or more diners — chances are solid that you've encountered a mandatory tip on your check. And, particularly if service was bad and you may want to offer a reduced tip, you may be wondering if it's legal to do this. Such mandatory "tips" are usually called "service charges," and while they generally go to servers, the exact distribution is often determined by restaurant management.

According to lawyer Ty M. Sheaks, a partner at McCathern Law and managing partner of the firm's office in Frisco, Texas, such forced gratuities are generally legal, although there are caveats. "Customers are generally legally required to pay an automatic gratuity if it's been adequately disclosed to the customer in some way before just appearing on the bill," he explained in an exclusive chat with Chowhound. That "tip vs. service charge" language is relevant here. Sheaks, who runs McCathern Law's restaurant and hospitality law section, says a tip is considered like a gift for a server, while a service charge is more of a fee that a business (the restaurant) charges, like a bar's cover charge, so it's an unavoidable part of the deal when you choose to sit down to eat there.

What's most important is that the charge must be clear to customers before they order. "The most common way restaurants notify the customer is by placing a statement somewhere on the menu stating that there will be an automatic gratuity on the bill," said Sheaks.

If the service charge isn't disclosed to you until you receive your check, then you should be able to avoid it (of course, this won't apply if it was clearly written on the menu and you ignored it). Otherwise, you're probably out of luck, said Ty M. Sheaks — although you can try complaining if you missed some signs of a bad restaurant and had a particularly unpleasant experience. "If the service or food was terrible a customer is always encouraged to speak to the management to try and have that charge removed," Sheaks said, "But the restaurant would be well within their discretion to refuse (if they're willing to deal with losing a customer or receive bad reviews)."

It's important to note that Sheaks' comments are specific to Texas law, so exact rules may vary elsewhere. For instance, Sheaks noted that in Texas, service charges can't exceed 20% of the check, so any that do must be knocked back to 20%. But service charges in general are permitted under U.S. federal law, so exact rules on how they're disclosed or maximum charges can differ from state to state. (California almost banned service charges in 2024 as part of a law against "junk fees," but made an exemption at the last minute.) Some states or cities also require restaurants to disclose how service charges are distributed. For example, in Washington, D.C., if the charge isn't directly for employees, it legally has to be mentioned. And just as tipping culture varies around the world, service charges may simply be illegal in other countries. For exact rules, it's best to consult a source local to your city or state.