Is it illegal to automatically add gratuity in NYC?

Can Restaurants in New York City Automatically Add a Gratuity?

Legality and Regulations

In New York City, restaurants are legally permitted to automatically add a gratuity to a customer’s bill, provided that the patrons are explicitly informed of this policy beforehand. The city’s Department of Consumer and Worker Protection (DCWP) requires restaurants to adhere to specific regulations when adding automatic gratuities.

Clear Signage and Communication

To avoid misunderstandings, restaurants must display clear and conspicuous signage at the entrance and on the menu stating that an automatic gratuity will be added to the bill. The signage should clearly state the percentage or amount of the gratuity and any conditions or limitations that apply.

Additionally, restaurants must verbally inform patrons of the automatic gratuity policy upon seating. This should be done in a clear and concise manner to ensure that customers are aware of the policy before they order.

Exception for Certain Groups

Restaurants may not automatically add a gratuity to the bill for certain groups, including:

• Groups of 8 or more people
• Groups that have a pre-negotiated service charge
• Groups that have a separate contract or agreement with the restaurant

Enforcement and Penalties

The DCWP is responsible for enforcing the regulations governing automatic gratuities in New York City. Restaurants that violate these regulations may face penalties, including fines, license suspensions, or other disciplinary actions.

Conclusion

Restaurants in New York City are permitted to automatically add a gratuity to a customer’s bill as long as they explicitly inform patrons of this policy beforehand. Clear signage and communication are essential to comply with the regulations and avoid misunderstandings. The DCWP enforces these regulations to protect consumers and ensure fair business practices in the city’s restaurant industry.