PALM BEACH COUNTY, Fla. — WPTV is helping you navigate your finances, tracking House Bill 535, which could reshape your dining experience and impact your wallet on your next visit to a restaurant.
A proposed amendment to the bill aims to empower diners by limiting when restaurants can add extra charges to a bill.
WATCH: Residents share thoughts about gratuity with WPTV
Specifically, it seeks to allow service charges only for parties of six or more while giving customers the option to decline these additional fees.
It reads: "A guest may not be required to pay an automatic gratuity or service charge if the guest complains to the operator of the public food service establishment about the quality of service provided by the establishment."
WPTV's Joel Lopez took to the streets of Atlantic Avenue, where locals shared mixed feelings about service charges.
Visiting Delray Beach from New Jersey, Ann Donlon expressed her frustrations.
“I don’t love it; I find it confusing. At the end, I’m left wondering if I should tip more. I prefer to decide how much to give,” she said.
Her friend Martina Scarrone chimed in with her own story on tip fatigue.
“I bought two croissants this morning, and there was a tip for just putting them in a bag," she said. "I said, ‘No tip,' then I felt guilty, because he was a great guy. But where does it end?”
HB535 also makes it easier for hotels and motels to remove guests who fail to pay their bills. The bill would clarify what is transient occupancy, what is non transient occupancy, when can you remove a guest or have to go through an eviction process.
This bill, if passed, could significantly change the landscape of dining out, but there are concerns about its potential consequences.
Samantha Padgett, vice president of government relations and general counsel for the Florida Restaurant and Lodging Association, warned that restricting service charges could negatively impact the food service industry as a whole.
“We do not want to prohibit service charges. It's going to be a significant negative impact on the food service industry in the state of Florida,” she stated.
Padgett emphasized the role service charges play in helping restaurants navigate rising costs.
“Those surcharges are a tool to help them continue to provide great service,” she explained. “You as an individual have had increased food costs, increased insurance costs, increased in every area of your life. Businesses are experiencing the same cost.”
“The cost of labor for restaurants in the state of Florida has increased dramatically," and many of our restaurants are commission-based pay models." she said, highlighting the importance of these charges for server wages.
Padgett also worries about the minimum party size of 6 saying most parties are smaller in size, which would prohibit the restaurants from adding gratuity and service charges.
That surcharge represents directly a server's wages, and that has been used to both provide "stability and competitive wages for our servers.”
“Our restaurateurs are experiencing an incredible increase in the cost of credit card processing and they're using a $2 or $3 surcharge to offset that extreme increase in credit card costs,” Padgett also pointed out.
It’s important to note that the restaurant industry operates on very thin margins.
“We're talking 2 to 3 percent sometimes," Padgett remarked. "Sometimes looking at the credit card surcharges; the credit card company is making more off of that transaction than the restaurant is making or at least they're making about the same.”
Although House Bill 535 is still pending, it could take effect as early as July 1, if it passes.
