California restaurants might get a last-minute reprieve from junk fees ban

Joanna Fantozzi

California’s controversial SB 478 bill — a ban on “drip pricing” and junk fees that is supposed to go into effect on July 1 — might allow an exception (with caveats) for restaurants, thanks to a last-minute reprieve bill.

Calif. State Bill Dodd introduced an addition to his original SB 478 bill, SB 1524, that would allow restaurants to add service fees or other surcharges if they are “displayed conspicuously on restaurant menus.” The bill would require restaurants to list surcharges before customers are ordering, and not as a surprise when they get the bill.

“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 said in a statement. “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.”

The last-minute legislation was created in response to criticism of the original junk fee ban bill by the restaurant industry, and this new update is supported by the California Restaurant Association and the Unite Here labor union.

“The California Restaurant Association strongly supports SB 1524, which will allow restaurants to continue to impose service charges, mandatory gratuities, and other common menu charges, provided the charges are clearly and conspicuously disclosed in advance to restaurant patrons,” Matthew Sutton of the California Restaurant Association, said in a statement. “This will enable restaurants to continue to support increased pay equity and to make contributions to worker health care and other employee benefits.  And, importantly, consumers will remain empowered to make informed choices about where they choose to dine out.”

Related:Minnesota has joined California in banning restaurant ‘junk fees’

In order to go into effect before the July 1 deadline, this piece of legislation would have to be passed in both the state Senate and Assembly, and get to Gov. Gavin Newsom's desk sometime before the end of June. 

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