Charging for ACA Costs is Legal Gamble for Restaurants

March 7, 2014 – In The News

Carolyn D. Richmond was quoted in the Law360 article “Charging for ACA Costs is Legal Gamble for Restaurants.” While the full text can be found in the March 7, 2014, issue of Law360, a synopsis is noted below.

Restaurants that add a charge to customer bills to cover Affordable Care Act (ACA) costs may attract media spotlight, but attorneys say business that participate in the growing trend are also inviting scrutiny from state consumer protection authorities already primed to crack down on bill-padding surcharges.

Many states ban or limit restaurants from imposing a surcharge over concerns that they can cause consumers to end up paying out more out-of-pocket than they intended to.

For example, New York’s consumer affairs law “clearly states that a seller serving food and beverage may not add a surcharge to listed items…with a few exceptions,” Richmond said.

Exceptions are generally limited to service charges tied to staff having to do extra work, like splitting a meal between two people or handling a large party, she and others noted.

In the wake of media reports spotlighting the trend, several restaurant clients have checked in with Richmond to ask if it’s something they could consider, she noted. That’s because many restaurants are struggling to find ways to cover new costs.

“I think as the months go by we’ll see a lot of entrepreneurial approaches to solving the crisis [of increased costs],” Richmond said.