Auto Gratuity: The "Convenience" Of Having Your Tip Included
A growing number of restaurants, hotel bars, and nightclubs are stripping the patron of all discretion in determining the appropriate tip for wait staff by automatically including a generous gratuity in the bill. While this auto gratuity, as the practice is known, has been in use by some restaurants for some time for large parties of eight or more, it is now being applied to smaller parties and even individuals. Auto gratuities seem to be more prevalent in upscale bars, restaurants, hotels and clubs where food and beverages are already expensive, and establishments frequented by a large numbers of foreign tourists who, it is claimed, may not be familiar with American tipping customs.
While local laws may permit restaurants and bars to include an auto gratuity, typically the practice must be disclosed. For instance, Title 6, §5-59 of the Rules of the City of New York permit bars and restaurants to impose a “bona fide service charge,” if the charge is “conspicuously disclosed to the consumer before the food is ordered.” While the widely-known practice of including auto gratuities for large parties may be satisfactorily disclosed in fine print at the bottom or end of the menu, it is questionable whether that type of disclosure would be sufficient for auto gratuities applied to individuals or small parties, a practice neither widely-known, nor widely-accepted. Indeed, such disclosure would be, at the very least, entirely ineffective for those who order food and/or drinks without the use of a menu, or order a “special” not found on the menu.
If you have paid an auto gratuity that was not conspicuously disclosed prior to the services being performed, please contact us immediately to discuss your legal options.