He'll flip ya...Flip ya for real...
I want the practice squashed because I know folks will play a game of "they make us do these fees" while also increasing the prices of the food.Iirc from the news, service fees were used in some in cities that passed increased minimum wage or other requirements to indicate to the customer that it wasn't that they were charging "more for the food" but because "the city is making us". As if the customers don't realize that the usual charge isn't just for the food, but also for the employees (and not paying them dirt hopefully).
I can imagine some places wanting to put the extra costs of inflatoin or whatnot off as a service fee instead of, for example, preinting new menus.
In any case, I'm guessing that the paying of the employees is pretty much always passed on to the customers. It's just a matter of how much extra profit for the owner that passing on is mingled with.