Introduction to the New Florida Bill
A South Florida congresswoman is throwing a spotlight on the controversial topic of restaurant service fees with a new house bill that could change the way diners tip at eateries. Filed in February, HB 535 (titled “Public Lodging and Public Food Service Establishments”) aims to make it easier for restaurants and hotels to remove customers who don’t pay their bills. But last week, state Rep. Demi Busatta (R-Coral Gables) slipped in an amendment that would give diners more control over extra fees — and this addition has polarized both diners and hospitality groups.
The Amendment and Its Implications
Her amendment would ban service fees and automatic gratuities for parties with six or fewer guests, and make them optional for larger parties of seven or more, so that these would not be required “if the guest requests not to pay such gratuity or service charge.” It also would force restaurants to clearly spell out their automatic gratuity and service charge policies on their menus as well as on receipts that diners would have to sign — and to provide a notice to the diner listing who gets the service fees and at what percentage.
“Most customers might presume that service fees go to a server, but what’s really happening is that service fees are going to restaurants to meet overhead costs,” Busatta tells the South Florida Sun Sentinel. “This confusion is what’s frustrating to the customer and frustrating from an employee standpoint.”
Background and Rationale
Busatta says she proposed the amendment after hearing numerous complaints from diners and restaurant owners alike — along with a personal experience. In early March, Busatta dined at a Miami restaurant, receiving a check that failed to mention a service fee and automatic gratuity and led her to ask for an itemized bill of fare. “The restaurant used three different ways to describe this charge beyond food and beverage,” Busatta says. “But who are these fees going to?” Busatta says she’s confident the bill will pass: “The amendment language I added passed with unanimous support on both sides of the aisle. It still has two more stops in the House and then the Senate, so I’ll stay on top of it.”
Reaction to the Amendment
The amendment proved to be divisive over the weekend, as illustrated by the Sun Sentinel’s 192,000-member “Let’s Eat, South Florida” Facebook group, where some commenters pointed to “government overreach,” while others said diners would use the amendment to justify never paying service fees. “Since this is South Florida, I see everyone gonna be complaining about the quality of service so they don’t have to pay the charge. I guarantee it,” wrote commenter Lisa Ciao. “If people hate service charges and fees, then don’t support establishments that have them,” member Eric Anderson wrote.
Impact on the Hospitality Industry
Restaurant service fees have spiked on bills of fare since the pandemic, according to an August 2024 report by the payment system company Square. In the second quarter of 2024, 3.7% of national restaurant transactions included service fees, which is up from 1.27% in early 2022. The Florida Restaurant and Lodging Association (FRLA), which promotes hospitality interests through state lobbying, says service fees help restaurants create a livable wage for workers, especially tipped servers who make less than Florida’s minimum wage. Giving diners the ability to stop paying them is “a bad idea,” says Samantha Padgett, FRLA’s vice president for government relations and general counsel.
Expert Insights
John Noble Masi, a Florida International University hospitality associate professor and chef, says he would rather customers decide to refuse service charges or gratuities. “I love the opt-out,” Masi says. “If a guest, regardless of any reason, decides a gratuity is not deserving, forcing them to pay for things is never the answer. That doesn’t send the right message.” Masi acknowledges that a ban on service charges and gratuities might hurt the wallets of restaurant workers, but adds that a livable wage is the restaurant’s responsibility — not the diner’s. “The [restaurants] that are flexible and trying to improve and manage these costs are the ones that can survive and thrive,” Masi says.
Conclusion
The proposed bill and its amendment have sparked a heated debate about the role of service fees in the hospitality industry. While some argue that the fees are necessary to ensure a livable wage for workers, others believe that they are unfair to customers and should be optional. As the bill moves through the legislative process, it remains to be seen how it will ultimately impact the industry and consumers.
FAQs
- What is the purpose of the new Florida bill?
The bill aims to make it easier for restaurants and hotels to remove customers who don’t pay their bills, and also includes an amendment that would give diners more control over extra fees. - What does the amendment propose?
The amendment would ban service fees and automatic gratuities for parties with six or fewer guests, and make them optional for larger parties of seven or more. - Why is the amendment controversial?
The amendment is controversial because it would give diners the ability to opt out of service charges, which some argue would hurt the wallets of restaurant workers. - What do experts say about the amendment?
Some experts, like John Noble Masi, believe that the opt-out option is a good idea, while others, like Samantha Padgett, argue that it would be a bad idea and remove a tool that has allowed restaurants to be successful. - When would the bill go into effect if adopted?
The bill would go into effect on July 1 if adopted.
