Yes, service fees are generally legal, but in 2026, they are subject to much stricter transparency and disclosure laws than in previous years. In the United States, several states including California, Colorado, and Massachusetts have implemented "junk fee" bans or regulations that require businesses—especially restaurants and hotels—to clearly disclose any mandatory fees in the initial advertised price. For example, a restaurant can still charge a 20% "service fee," but it must be explicitly noted on the menu and the final receipt. Under federal law, these fees are technically the property of the employer, not a tip, unless state-specific laws dictate otherwise (like in New York). Internationally, many countries in Europe and Asia have "all-in" pricing laws where any mandatory service charge must already be included in the price shown on the menu, making the practice of adding a separate fee at the end of a meal illegal in those specific jurisdictions.