In response to the Federal Trade Commission's (FTC) Notice of Proposed Rulemaking on Unfair or Deceptive Fees, the Independent Restaurant Coalition submitted comments on February 7, 2024, urging the Commission to reconsider its proposed rule, emphasizing its potential adverse effects on the restaurant industry's progress in fair and stable employee compensation. 

The proposed rule aims to eliminate service charges, overlooking the nuanced compensation models crucial for equitable and predictable employee wages. Recent studies exposing wage disparities have prompted many restaurants to explore alternative models like service charges, resulting in success stories of improved employee wages and benefits.

The IRC commends the Commission for initiating the conversation but cautions against a one-size-fits-all approach. The proposed rule may lead to customer loss, jeopardizing restaurant survival and putting employees at risk. The IRC proposes transparent communication guidelines for service charges through various channels.

As the FTC considers feedback, the IRC remains dedicated to fostering transparency and ensuring that diners are fully aware of service charge practices. 

The IRC stands firm in its commitment to championing the vital independent establishments that enrich local communities nationwide. And we encourage you to join us. If you utilize service charges in your business to provide employee compensation and benefits we encourage you to call your Members of Congress today. 202-224-3121.

You'll find the IRC's letter to the FTC here.