Bay Area lawmakers who led the effort to ban extra fees at restaurants and other businesses in the state are now asking, “is it too late to change our order?”
With just weeks until the law goes into effect, state Sen. Bill Dodd, D-Napa, and other lawmakers want to amend it to clarify that fees can be charged as long as they are clearly advertised on restaurant menus.
The law signed in October by Gov. Gavin Newsom, Senate Bill 478, prohibits restaurants from charging undisclosed “junk fees” that had become more prevalent in the aftermath of the COVID-19 pandemic. The fees, usually a percentage of the bill, can sometimes show up on a check at the end of a meal without prior notice.
The original bill was authored by Dodd and Sen. Nancy Skinner, D-Berkeley, and was specifically meant to target so-called drip pricing, which involves advertising a cheaper price than consumers ultimately have to pay.
Online ticket sellers, lodging booking companies and restaurants that did not disclose their fees beforehand were some of the main targets of the law.
“Restaurant customers shouldn’t be surprised when they get their checks by a slew of extra charges they were not expecting,” Dodd said.
“Restaurants are vital to the fabric of life in California, and they should be able to cover costs as long as they do so transparently.” State Sen. Scott Wiener
“Many restaurants are up-front with their business practices but too many aren’t, necessitating action. This proposal will level the playing field for all restaurants and address confusion and disagreement about what is permissible under state law,” he said.
The new bill, Senate Bill 1524, is supported by the California Restaurant Association and the Unite Here food workers union.
Matthew Sutton, a senior vice president with the California Restaurant Association, said the practice by restaurant owners supported a range of benefits that the law would allow.
“This will enable restaurants to continue to support increased pay equity and to make contributions to worker health care and other employee benefits,” Sutton said.
“And, importantly, consumers will remain empowered to make informed choices about where they choose to dine out,” he said.
The update to the law was co-authored by state Sen. Scott Wiener, D-San Francisco. It could be approved by the Legislature within the month, with the previously passed law set to take effect on July 1.
“Restaurants are vital to the fabric of life in California, and they should be able to cover costs as long as they do so transparently,” Wiener said. “SB 1524 clarifies portions of the law that pose a serious threat to restaurants. The bill strikes the right balance between supporting restaurants and delivering transparency for consumers, and I’m proud to support it.”