Did you pay much more at a restaurant than expected? Here’s how the Bay Area surcharges work

Service fees can help create a more even wage distribution, meet minimum wage ordinance requirements, or pay for worker benefits like 401K contributions. In many cases, these are collected simply as tips for workers.

Depending on the restaurant, this type of charge may appear on an invoice as a “service charge”, “service charge”, “on-site dining charge”, “cost of goods sold”, “automatic tip” or a Other name. At the Zuni Cafe in San Francisco, for example, it’s called a “fair wage” charge. Although there is no standard rate, the most common rate is 20%.

In most cases, Bay Area restaurants don’t require you to tip in addition to the service charge, but there are exceptions. San Francisco’s Che Fico, for example, implemented an additional 10% dining fee without removing tipping to pay for programs such as mental health support and profit sharing.

Bay Area restaurants have tried to replace tipping over the years, either adding a percentage to the bill or raising prices to pay workers more instead of tipping. The results have been mixed. Some have started taking tips again, usually citing staffing issues. Waiters tend to earn more in restaurants with traditional tips, while cooks and housekeepers benefit from service charges.


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