The Service Charge on Your Wedding or Banquet Invoice

The 20, 22, or 25 percent line at the bottom of a catering invoice rides on a four- or five-figure bill. I can get you to an answer with two facts: what the venue showed you when you were pricing the event, and which word the venue used for the charge.

If the menu or brochure priced the food and the disclosure said the total already included the charge — lawful. If the charge was described as an automatic and mandatory gratuity, stated as a percentage, disclosed clearly — the statute has a paragraph for exactly that, and it is lawful. If the venue advertised item prices, added a percentage on top at contract or invoice, and told you in writing that the charge is not a gratuity — that is the hard case, and the reason it is hard is that the venue’s own sentence is the problem.

This reaches conduct on or after January 1, 2025 — that is the statute’s effective date. For banquet and catering specifically, the Attorney General’s office takes the further position that the law applies to contracts signed on or after that date. That position is set out below; it is that office’s reading, not a court’s.

The rule the venue has to meet

Minn. Stat. § 325D.44, subd. 1a(a):

A person engages in a deceptive trade practice when, in the course of business, vocation, or occupation, the person advertises, displays, or offers a price for goods or services that does not include all mandatory fees or surcharges.

A catering menu is a displayed price. A wedding brochure with per-plate numbers is an offered price. A proposal emailed to you with a per-person figure is an offered price. The duty attaches when the venue puts the number in front of you — not at the moment you sign.

Subdivision 1a(b) defines what has to be inside that number:

(b) For purposes of this subdivision, “mandatory fee” includes but is not limited to a fee or surcharge that:

(1) must be paid in order to purchase the goods or services being advertised;

(2) is not reasonably avoidable by the consumer; or

(3) a reasonable person would expect to be included in the purchase of the goods or services being advertised.

The connector is or. A blanket percentage applied to every order satisfies clause (1) by itself.

Paragraph (h) — exactly what it shelters

The food-and-beverage paragraph is the venue’s defense, and it is one sentence:

(h) A food or beverage service establishment, including a hotel, is compliant with this subdivision if, in every offer or advertisement for the purchase of a good or service that includes pricing information, the total price of the good or service being offered or advertised includes a clear and conspicuous disclosure of the percentage of any automatic and mandatory gratuities charged.

Four things are in that sentence, and each one is a condition.

“[I]n every offer or advertisement … that includes pricing information”. Not one of them. Every one. A brochure that states the percentage and a website menu that does not are not both compliant because the brochure was.

“[T]he percentage”. A number, expressed as a percent. “A service charge will be added” is not a percentage. “A service charge of 22% will be added” is.

“[A]utomatic and mandatory”. A voluntary tip line is not this. A charge applied only to parties over a certain size is automatic and mandatory as to those parties.

“Gratuities”. This is the word the whole paragraph turns on. Paragraph (h) shelters the disclosed percentage of an automatic and mandatory gratuity. It does not name service charges, administrative charges, kitchen fees, wellness fees, living-wage fees, or facility fees, and it does not say that any percentage-based charge qualifies because it is stated as a percentage.

The Attorney General’s Price Transparency Law FAQ (Revised 4/2025) reads paragraph (h) to mean that food and beverage establishments, including hotels, “can continue to charge automatic and mandatory gratuities,” that “[t]hese gratuities do not need to be included in the advertised total price,” and that the law instead “requires that such automatic and mandatory fees be disclosed clearly and conspicuously.” It then adds the limit:

However, if the charge at issue is not a gratuity as that term is defined under applicable Minnesota laws and rules, and is instead a mandatory fee, then that fee must be included in the total price advertised, displayed, or offered to consumers by the restaurant.

That is the Attorney General’s view of the statute rather than a court’s, and it points straight at the next question: where is “gratuity” defined?

Where Minnesota defines “gratuity” — and why the answer is awkward for a venue

It is defined in the wage law. The definition is written “for the purposes of sections 177.21 to 177.35” — the wage-and-hour chapter — and the price-transparency statute does not define the word at all, which is why the Attorney General’s office points to “applicable Minnesota laws and rules.” Minn. Stat. § 177.23, subd. 9:

“Gratuities” means monetary contributions received directly or indirectly by an employee from a guest, patron, or customer for services rendered and includes an obligatory charge assessed to customers, guests or patrons which might reasonably be construed by the guest, customer, or patron as being a payment for personal services rendered by an employee and for which no clear and conspicuous notice is given by the employer to the customer, guest, or patron that the charge is not the property of the employee.

I want to emphasize the back half of that definition. An obligatory charge is a gratuity if two things are true: a customer might reasonably construe it as payment for personal services, and the employer gave no clear and conspicuous notice that the charge is not the property of the employee.

The Department of Labor and Industry’s rule fills in both halves. Minn. R. 5200.0080, subp. 4a:

For purposes of Minnesota Statutes, section 177.23, subdivision 9, obligatory charges which might reasonably be construed by the guest, customer, or patron as a sum to be given to an employee as payment for personal services rendered, include, but are not limited to, service charges, tips, gratuities, and/or surcharges which are included in the statement of charges given to the customer.

Subpart 4b defines the notice that takes a charge out of the definition:

For purposes of Minnesota Statutes, section 177.23, subdivision 9, clear and conspicuous notice that the obligatory charge is not a gratuity is notice clearly printed, stamped, or written in bold type on the menu, placard, the front of the statement of charges, or other printed material given to the customer. Type which is at least 18 point (one-fourth inch) on the placard, or 9 point (one-eighth inch) or larger on all other notices is clear and conspicuous.

So a venue faces a choice it cannot make both ways, and the sentence it prints is the choice.

If the venue printed the notice — “this service charge is not a gratuity and is not the property of the employees,” in the required type — then under § 177.23, subd. 9 the charge is not a gratuity. Which means paragraph (h), a paragraph about disclosing the percentage of any automatic and mandatory gratuities, is not obviously available to shelter it, and the charge looks like an ordinary mandatory fee that belonged inside the advertised price.

If the venue printed no such notice, and a customer might reasonably construe the charge as payment for the staff’s personal services, then by the statutory definition the charge is a gratuity — and Minn. Stat. § 177.24, subd. 3 says that “any gratuity received by an employee or deposited in or about a place of business for personal services rendered by an employee is the sole property of the employee,” and that no employer may require an employee to share it with the employer.

I am putting both positions on the page because both are readings of statutes nobody has litigated in this context yet. Searching the Minnesota Supreme Court, the Minnesota Court of Appeals, the United States District Court for the District of Minnesota and the Eighth Circuit on CourtListener on September 18, 2026, I found no decision construing § 325D.44, subd. 1a, and none addressing how subdivision 1a(h) interacts with § 177.23, subd. 9. That database is thin on unpublished Minnesota opinions, so that is what had surfaced as of that date, not a statement that nothing exists.

The date, and where it comes from

Subdivision 1a was added by Laws 2024, chapter 111, sections 1 and 2. Each section carries the identical clause:

This section is effective January 1, 2025, except that this section is effective June 1, 2025, for industries where the prices are regulated by the Metropolitan Airports Commission.

Conduct before January 1, 2025 is not a violation of subdivision 1a.

For events in particular, the Attorney General’s FAQ takes the further step of tying it to the contract date:

Yes, the new law generally applies to a business’s banquet or catering services. Accordingly, when advertising, displaying, or offering a price for these services, the total price must include all mandatory fees such as a surcharge or service charge. The new law applies to banquet or catering contracts signed on or after January 1, 2025, with consumers, which is the date the new law takes effect.

And more generally: “This law is not retroactive. To the extent a contract was signed before January 1, 2025, this law does not apply regardless of when the contractual obligations are completed.”

Those are the Attorney General’s positions, retrieved from that office’s own published FAQ. They are not holdings. But a venue will cite them, and if your contract was signed in 2024 for a 2025 wedding, that is the sentence you will be shown.

What is plainly lawful

Four things, and I would rather you learn them here than after you have spent a month on it.

A disclosed gratuity percentage is lawful. “All parties of 8 or more people will incur a 20% automatic gratuity,” printed on the menu, is the fact pattern paragraph (h) was written for. It is fine, and that is the line the Attorney General’s FAQ prints on both of its compliant example menus.

Menu prices that already include everything are lawful. A venue that prices the plate at the all-in number and then itemizes the components is complying. Nothing in this statute limits what a business may charge — the Attorney General’s FAQ is explicit that the law “does not dictate how much someone can charge for goods or services” — and nothing stops a venue from showing you the breakdown as long as the total it advertised was the real total.

A quoted total that includes the service charge is lawful even if the charge is not a gratuity. Look at how the Attorney General’s own compliant banquet example is built. Food $10,500, liquor $1,050, labor $5,000, total $16,550 — the line items sum exactly to the total, because the 5 percent is already inside the food and liquor figures. The footnote reads “[a] service charge of 5% has been added to all food and beverage. The service charge is not a gratuity, and is used to cover the costs associated with employing staff.” The charge is disclosed, it is not called a gratuity, and the food and liquor figures you were shown already contain it. The office’s non-compliant version of the same event shows $10,000, $1,000, $5,000 and a $16,000 total, with a footnote saying only that “[a]n additional service charge will be added.” Same event, same charge; the difference is whether the numbers you were shown were the real ones.

And where the total genuinely cannot be fixed in advance, subdivision 1a(g) lets a business comply by disclosing, clearly and conspicuously, “(1) the factors that determine the total price, (2) any mandatory fees associated with the transaction, and (3) that the total cost of the services may vary.” Head counts move. A venue that discloses the factors, names the fees, and says the total may vary has a real answer.

The three documents that settle it

You already have all three.

The menu, brochure, or proposal you priced from — the displayed or offered price.
The signed contract and banquet event order — the date, and whatever the venue said about the charge.
The final invoice showing the percentage line.

Put them side by side and the question answers itself: did the number you were shown include the charge, or not, and what did the venue call it?

Madgett Law, LLC is evaluating whether Minnesota banquet and catering pricing practices can be challenged on behalf of the people who paid. Nothing here is advice about your contract, and sending documents to a law firm does not make you a client. If you hosted an event and the brochure price was not the price, we want to see the paperwork.

Published by Madgett Law, LLC. Statutes, rules, session laws, and the Attorney General’s FAQ verified September 18, 2026 against the Minnesota Office of the Revisor of Statutes and ag.state.mn.us.