Restaurant Workers: Your Service Charges, Your Earnings

In Washington, businesses that provide “food, beverage, entertainment, or porterage” may impose a mandatory service charge to their patrons bills for those services. RCW 49.46.160 defines a “service charge” as a fee collected by employers from customers specifically for services rendered by the employees. Service charges are distinct from tips, and they cannot be included in calculating an employee’s hourly wages. Id.

Businesses may elect to retain the entire service charge; however, those businesses that do impose such charges are required to disclose to their patrons how much of that charge—if any—will be paid to the employees serving the customer and how much will be retained by the business. That disclosure must be provided to the customer on both the menu and the customer’s bill. Id. If a disclosure is missing from either the menu or the receipt, or if the disclosure does not specify the amount the employee is to receive, then the employee is entitled to retain the entire amount.[1] Strict disclosure requirements are imposed to avoid customer interpretation that the service charge is a mandatory tip. RCW 49.46.160.

Employees of businesses that provide food, beverage, entertainment, or porterage should know that they are entitled to the full amount of any service charge their employer imposes if the employer does not properly disclose the purpose and distribution of the fee in accordance with Washington law. Employers should be aware that they will be liable to their employees for failure to properly disclose service charges and how the charges are allocated on both the menus and receipts provided to customers.

[1] See Washington State Dep’t of Labor & Industries, Tips and Service Charges, https://www.lni.wa.gov/workers-rights/wages/tips-and-service-charges (last visited Dec. 18, 2025).