A rooftop restaurant perched atop a historic Downtown Los Angeles hotel is facing backlash after a diner's bill showed a 5 percent administrative surcharge layered on top of a mandatory 20 percent gratuity, pushing a $173.25 subtotal to $226.36 once tax was added. üca terraza, the Latin-inspired restaurant and lounge on the roof of The Delphi Hotel, discloses the fee on its virtual menu, saying it is retained entirely by the restaurant to help cover rising wages and benefits.
The complaint surfaced after a diner posted on Reddit about noticing the 5 percent fee before paying the bill, frustrated that it was stacked on top of the already mandatory tip, according to the New York Post. The diner's order included two beers, still water, tuna crudo, seared scallops, and carne asada tacos priced at $24, with the subtotal including the surcharge landing at $173.25 before the mandatory gratuity and Los Angeles's 10.25 percent sales tax pushed the final total to $226.36. The Post reported it reached out to üca terraza and The Delphi Hotel for comment on the surcharge.
A Legal but Controversial Practice
However frustrating to diners, the combination of a surcharge and a mandatory gratuity is legal in California. Senate Bill 1524, signed into law in June 2024, explicitly permits restaurants, bars, and food service businesses to charge mandatory service fees and surcharges above listed menu prices, provided the fees and their purpose are clearly displayed on menus or advertisements, according to analysis published on LegiScan. That carve-out exists because California's broader Honest Pricing Law, SB 478, which took effect in July 2024, otherwise prohibits most commercial businesses from advertising prices that exclude mandatory fees, per the California Department of Justice.
The distinction matters legally, too. Under California Labor Code Section 351, voluntary gratuities left by customers belong entirely to employees, while mandatory administrative surcharges retained by a restaurant are treated as general business revenue, per In Motion Law. That means management can direct surcharge revenue toward overall labor costs and employee healthcare benefits, even as the mandatory 20 percent gratuity is legally required to go to staff.
Rising Wages Behind the Fee
Restaurant operators in Los Angeles have increasingly leaned on these fees as labor costs climb. The minimum wage in the City of Los Angeles rose to $18.42 per hour in July, while unincorporated Los Angeles County reached $18.47 per hour, up from $17.87 the year before, according to the City of Los Angeles Office of Wage Standards. California is also one of seven states that strictly bars employers from claiming a tip credit, meaning restaurants must pay servers and bartenders the full state and local minimum wage before any tips are added, per QuickerTip.
Those pressures have rippled across the industry. Full-service restaurant prices in California rose an estimated 2.1 to 2.2 percent following the state's fast-food minimum wage hike to $20 per hour in 2024, as full-service operators raised base wages to compete for workers, according to the Cato Institute. More than 100 restaurants in Los Angeles closed in 2025 alone, with owners citing labor costs, rent, and food inflation as primary factors, per reporting on Los Angeles Times data compiled by minimumwage.com.
Not the First Online Complaint
üca terraza has faced previous online criticism from diners over its gratuity fees, and the Post noted that similar stacked charges have popped up elsewhere: a Tampa restaurant charged a 3 percent surcharge called a venue fee earlier this year, and another restaurant charged customers an 18 percent living wage fee in 2025. Reddit commenters have criticized üca terraza's administrative fee and overall pricing in the wake of the viral post.
A Rooftop With Deep Roots
The restaurant sits atop a building with a long history. The Delphi Hotel at 550 South Flower Street is a 12-story mid-century Moderne structure built in 1956 as headquarters for Superior Oil Company, and it operated as The Standard Downtown LA from 2002 until 2020, according to Wikipedia. üca terraza opened atop the hotel in mid-2025 as a Latin-inspired rooftop restaurant and lounge, featuring Yucatán-influenced cuisine, agave-based cocktails, and weekly Thursday night live jazz, per Loop Magazine, with a concept designed to evoke the beach clubs of Tulum.
The rooftop is just one piece of The Delphi's revenue strategy. Beyond evening dining and bar service, the hotel also offers daytime pool access starting at $56 per guest and cabana rentals up to $224 through ResortPass, according to the booking platform's listing.
