Minnesota junk fee law: what it means for restaurant service charges

For years, restaurants in many states added a service charge or a kitchen fee at the end of the bill, and guests found out only when the check arrived. Minnesota changed that on January 1, 2025. The state's junk fee law requires businesses to include mandatory fees in the total price they advertise, and unlike the federal rule on the same subject, it does not exclude restaurants. This guide explains what the law says, how it treats service charges and automatic gratuity, and how to review your menu. It is general information, not legal advice. Ask a lawyer to review your menu and the Attorney General's guidance for your case.

What does the Minnesota law say?

Under Minnesota Statutes section 325D.44, as reported by law firms and the press, a business must include in the total price it advertises, displays or offers any mandatory fee that the customer must pay. The Attorney General's office has said that a restaurant's mandatory fee, other than an automatic and mandatory gratuity, must be included in the total price advertised, displayed or offered to consumers. The rule took effect on January 1, 2025. The law is not a price cap: it does not say how much you can charge, only that the price you show must be the price the guest pays.

Does it apply to restaurants?

Yes. Press coverage notes that the Minnesota law applies to restaurants even though a federal rule on a similar subject excludes them. That means a menu that lists a price of 15 dollars and adds a mandatory kitchen fee, a service fee or an operations fee at the end is the kind of practice the law targets. If a fee is required for the guest to buy the item, it belongs in the price on the menu.

What about automatic gratuity?

The law makes an exception for an automatic and mandatory gratuity, as that term is defined in other Minnesota law, but the exception comes with a condition. Food and beverage establishments can comply by clearly disclosing the percentage of the automatic gratuity. A law firm commentary warns that this carve-out is not a general license to keep a service charge or kitchen appreciation fee outside the menu price. In short, a gratuity that goes to staff and is clearly described and disclosed may be handled differently from a fee that goes to the business, and the difference matters.

What about large-party gratuity?

Many restaurants add an automatic gratuity for large parties. If you do, state it clearly where the guest will see it before ordering: on the menu, on the reservation page and at the table. Name the percentage. A line such as an automatic gratuity of a stated percentage for parties of a stated size, printed where guests will see it, is far clearer than a note at the bottom of the bill. Make sure it is truly a gratuity that goes to the staff, not a service fee for the house, and ask a lawyer to review the wording.

What are the penalties?

The Attorney General may seek injunctions, restitution, disgorgement and civil penalties of up to 25,000 dollars per violation, along with costs, according to law firm summaries. Commentators disagree about whether private individuals can sue for damages under this part of the statute, so do not assume you are safe from a customer complaint. Treat a complaint to the Attorney General as a real risk.

How should you review your menu?

A one-hour audit is worth the time.

• List every charge a guest may pay beyond the menu price and tax.
• Mark which ones are mandatory and which are optional.
• Move mandatory charges into the menu prices, or restructure them as an automatic gratuity with clear disclosure.
• Check your website, third-party listings and delivery menus, not only your printed menu.

Then ask a lawyer to confirm your wording. Ask your point-of-sale provider to show how fees appear on the check and the receipt, since a setting you forgot can add a charge without anyone noticing. Update third-party listings, reservation pages and delivery menus on the same day.

How should you tell staff and guests?

If you change prices to fold in a fee, tell staff how to explain it. A short line on the menu, such as a note that prices include all fees, helps guests understand. Keep staff pay clear, and document how any gratuity is distributed.

What other rules touch service charges?

Tax treatment of a service charge depends on how it is described and used, and wage rules matter too, since Minnesota does not allow tips to count toward the minimum wage. See our guide on Minnesota's minimum wage and no tip credit rule. Ask your accountant about tax before you change how you charge. If you raise menu prices to fold in a fee, guests will notice the higher number, so explain the change with a short, honest line, and make sure the price you show is the price they pay. Keep a copy of your old and new menus and the date of the change.

Are you tired of explaining the check?

Clear prices build trust, and trust brings guests back. Mosey is a food-first app where diners search by dish and mood, rate what they ate and keep lists of places they want to try, and where independent restaurants and cafes get tools for their own page, menu and regular guests. If you want the first thing guests learn about your restaurant to be the food and the honest price, being found by the dish is what Mosey is built around.

More guides for your business:

• How to keep your Minnesota restaurant busy through winter
• Minnesota minimum wage and no tip credit for restaurants (2026)
• Minnesota earned sick and safe time: what restaurant owners must do

More in the US guides for food businesses.