Massachusetts Restaurant Service Charges for Large Parties
A restaurant may automatically add a service charge when a dining party reaches a specified size. Massachusetts Attorney General guidance under 940 CMR 38.00 addresses this practice, but its conditions matter: a disclosed charge is not automatically money the restaurant may keep.
A limited rule for party-size charges
The guidance states that a restaurant meeting the cited statutory definition does not violate 940 CMR 38.04(1), (2), and (6) by imposing a mandatory service charge based on party size when the proceeds are exclusively remitted to eligible service employees in compliance with G.L. c. 149, § 152A(d). This is not a blanket exemption for every restaurant surcharge.
The guidance does not prescribe one universal group size or percentage. A restaurant’s actual policy must identify when the charge applies and what percentage it will collect.
Disclose the policy whenever prices are provided
The fact and circumstances of the party-size service charge must be clearly and conspicuously disclosed whenever pricing information is provided. The charge may be expressed as a percentage. Operators should check printed menus, online menus, and other channels displaying prices; first revealing the charge on the final bill is not a substitute for the required earlier disclosure.
An illustrative policy might state that parties of six or more are charged an 18% service charge, with all proceeds distributed to legally eligible service employees. Those numbers are examples, not legal requirements. The wording must accurately describe the restaurant’s actual practice, and no sample sentence alone establishes compliance.
Distribution is a separate requirement
G.L. c. 149, § 152A(d) provides that “the total proceeds of that service charge or tip shall be remitted only to the wait staff employees, service employees, or service bartenders”. Operators must follow the statute’s distribution rules rather than treating a qualifying service charge as unrestricted restaurant revenue.
A house or administrative fee requires a different analysis. Section 152A addresses descriptions informing patrons that such a fee is not a tip or service charge for service employees. Changing a label does not automatically satisfy pricing rules or bring an administrative surcharge within the guidance’s limited treatment of party-size service charges.
Check the disclosure and the actual payment records
Restaurants should compare their stated threshold, point-of-sale settings, customer disclosures, and employee distribution records. Customers can retain menus and receipts to compare the charge with the policy presented before ordering. Special arrangements may implicate other wage or consumer protection requirements and should be reviewed with an attorney.
Official materials
Legal Disclaimer. Originally published: 10/17/2026. This article provides general information only and is not legal advice for any particular matter. Laws, policies, procedures, fees and agency practices may change; their application depends on the facts and jurisdiction. Consult a qualified attorney about your circumstances before acting on this information. Reading this article or contacting Blumsack & Canzano does not, by itself, create an attorney-client relationship. Past results do not guarantee future outcomes. This material may be considered attorney advertising in some jurisdictions.
