what is service charge restaurant

A service charge in a restaurant is a mandatory fee that is automatically added to the bill and collected in exchange for a product or service. It is different from a tip, which is a voluntary amount that a customer chooses to pay to the server or other restaurant staff. In California, service charges are not considered tips, and they belong to the restaurant and not to the employees. Restaurant owners can distribute the service charges as wages to all employees, including those who are not included in the gratuity system, such as cooks and dishwashers. However, under California state law, restaurant service charges are the property of the employer, and employers can keep them for themselves. Some California cities have passed ordinances that require restaurant owners to pass on all service charge payments to their staff. Service charges can be labeled as "health insurance," "administration" fees, convenience fees, or surcharges.