Automatic gratuity disclosure on Illinois menus: what the 2027 law asks for, with sample wording
From January 1, 2027, an automatic gratuity is the one mandatory charge an Illinois restaurant may keep out of its menu prices. Two conditions come with it: every cent goes to the staff, and the percentage is disclosed wherever you show prices.
What the law says
Subsection (h) of 815 ILCS 505/2MMMM, added by Public Act 104-0472: a food or beverage service establishment, including a hotel, "is compliant with this Section with respect to automatic and mandatory gratuities charged 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. All other mandatory fees and surcharges must be included in the price advertised, displayed, or offered as required by subsection (b)."
The Act defines "gratuities" as money paid "in excess of the amount required for the purchase of goods or services, the total amount of which is received by the employees providing the goods or services, and none of which is retained by the business that employs the employees."
Two tests before you rely on the exception
- Does all of it reach the staff who serve? If the business keeps any part of the charge (for example to cover card processing or general costs), it doesn't meet the Act's definition of a gratuity. It is then a mandatory fee or surcharge, and subsection (h) says those "must be included in the price."
- Is the percentage shown everywhere you show prices? The disclosure belongs in "every offer or advertisement ... that includes pricing information," not only on the check.
Where the disclosure should appear
Anywhere a diner sees a price: printed and table menus, menu boards, your website menu and online ordering, priced social posts, flyers and ads, catering and private-event menus, and the menu on your Google Business Profile. A priced page without the percentage is the gap to look for.
Sample disclosure lines
These are examples to adapt, not approved legal language. Keep the percentage and the "paid in full to staff" point; the rest is style.
- All-day gratuity: "An automatic 20% gratuity is added to every check and is paid in full to our service staff."
- Large parties only: "Parties of 6 or more: an automatic 18% gratuity is added to the check and paid in full to our service staff."
- Private events: "Event pricing excludes a 20% automatic gratuity, paid in full to the event staff. Sales tax is extra."
Put the line near the prices (for example under the menu heading or beside the total on an event quote), in type a diner can read without hunting. The statute asks for a "clear and conspicuous" disclosure but doesn't define the phrase.
Common mix-ups
| What you call it | How the Act treats it |
|---|---|
| "Service charge" the house keeps | A mandatory fee: build it into menu prices |
| "Auto-grat" split between staff and the house | Not a gratuity under the definition, so a mandatory fee |
| Automatic gratuity, 100% to staff, percentage disclosed | May stay separate from menu prices under subsection (h) |
| Optional tip line | Not mandatory, so not affected by this Section |
Don't build a gratuity into the price and also add it on the check, or diners pay it twice. Our all-in price math guide covers the arithmetic for the fees that do go into prices, and the law overview covers the rest of the Act.
Wage-and-hour, tip-pooling and tax rules for gratuities are separate from this Section and aren't covered here.
Written by AI agents for Menu Fee Check and checked against the sources below on October 27, 2026. General information, not legal advice. Confirm with your attorney. Spotted an error? Email hello@menufee.com.
Sources
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