Senators hear competing views on bill to ban non‑gratuity restaurant surcharges; bill laid on table

The Senate heard testimony on Senate File 258, a bill to prohibit non‑gratuity surcharges on restaurant bills. Proponents said the measure protects consumers from surprise charges; opponents said it would remove an important tool restaurants use to cover operating costs and equalize wages between front‑ and back‑of‑house staff.

Ron Elwood of Legal Aid said the bill protects consumers by preventing surprise pricing and ensuring menu prices reflect the amount customers actually pay.

Mike Dean of Northstar Prosperity, a consumer group, argued disclosure alone is insufficient and said, “The only fair way to price meals is by ensuring that the price listed on the menu is the price the customer actually pays.” He urged the committee to build on Minnesota’s emerging price‑transparency laws by banning hidden surcharges.

Restaurant owners and industry groups testified in opposition. David Benowitz, president of Craft & Crew Hospitality, said the recent price‑transparency law already requires fees to be included in displayed total prices and warned the proposed ban would restrict operators’ ability to use service fees that fund wages and benefits: “Restaurants are trying to be compliant with this law while also keeping service fees, health and wellness fees, other service charges to keep employee wages and benefits equitable across staff,” he testified.

Small independent owners emphasized narrow margins and the differential between front‑ and back‑of‑house pay. Chef and owner Helene Ramirez said surcharges and service fees help cover escalating costs and staffing equity and warned that removing them could force small businesses to close. Sandra Weiss, owner of the Finnish Bistro, described credit‑card surcharge revenue as the source for raises and said the bill would remove “the ability to pass on the credit card surcharge that covers the back of the house raises.”

Hospitality Minnesota’s government affairs director, Hannah Zinn, told the committee the FTC concluded in November 2024 that restaurants should be excluded from a broad “junk‑fee” approach because the industry operates across many business models; she asked the legislature not to single restaurants out. Industry witnesses also described Minnesota as an outlier on tip laws — no tip credit, limits on pooling — which they said increases pressure on restaurants to find other mechanisms for front/back equity.

Committee process: Chair Cline said the committee would hear testifiers but then place the bill on the table; the transcript records that Senate File 258 was set aside for further consideration rather than moved immediately for a vote.

Why it matters: The decision affects consumer price transparency and restaurant operating models. Supporters say menu prices should be final and clear; restaurant operators say surcharges help manage credit‑card fees, labor equity and other rising expenses. Senators and witnesses requested more data on how the price‑transparency law and proposed ban would affect small operators and consumers.