San Diego

City Attorney to Investigate Restaurants' 3 Percent Surcharge

If you have eaten out recently, you may have noticed a small fee tacked on to the end of your bill – a three percent charge written off as a “government mandated surcharge.”

Restaurants charging a minimum wage surcharge could be breaking the law, according to the San Diego City Attorney, who intends to investigate and pursue legal actions against restaurants charging the fee.

If you have eaten out recently, you may have noticed a small fee tacked on to the end of your bill – a three percent charge written off as a “government mandated surcharge.”

Some restaurants have added the charge after the minimum wage across California, including in San Diego, went up in 2017 to $11.50 an hour.

San Diego City Attorney Mara Elliot said the fee is the restaurant owner's way of protesting new minimum wage laws which took effect on Jan. 1.

Most restaurants opposed the minimum wage change, saying food servers typically make well over minimum wage because of tips they get to take home on top of their paychecks.

Elliot said restaurants have had more than enough time – upwards of six months – to come up with a business plan to pay their employees the minimum wage.

She said customers should pay the cost that is advertised on the menu.

“Many of these diners did not learn of this so-called surcharge which is not mandated by any governmental entity until they receive their check,” Elliot said. “At that point, it was too late to send the food back.”

Elliot said her office will launch an investigation into the matter and begin sending letters to restaurants that include the false surcharge.

“I believe our restaurant owners ought to be honest as well,” Elliot said. “If a family goes out to dinner, they should be able to trust that the prices on the menu are the prices they will pay.”

Elliot said her office has a Consumer Protection Unit handling complaints. She did not say what the penalty would be for restaurants violating the law, because every complaint will be evaluated on a case-by-case basis, Elliot said.

The California Restaurant Association said in a statement it is important to understand why restaurants opted to do this. 

"To adapt to wage increases, restaurants around the state have either raised menu prices, reduced employees’ hours, reduced their own hours of operation, or adopted a surcharge or, in some cases, eliminated tipping and are now using a service charge. San Diego is not alone in this challenge and restaurants are not the first business to use a surcharge -- many hotels and transportation providers also use a surcharge," the association said in a statement.

"Whatever avenue each business chooses as a way to survive into the coming years, restaurants in San Diego and in every city want to be around for a long time to come," the statement continued.

One restaurant owner told NBC 7 that not only is the surcharge questionable legally, but it’s just bad business.

The owner, who did not wish to be identified, said people go out to eat to escape life for awhile, and the last thing they want to think about is a complicated political issue at the end of a good meal.

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