California is set to implement a new law in July that will make restaurant surcharges illegal, aimed at eliminating hidden fees and ensuring transparency for consumers. Under SB478, which goes into effect on July 1, restaurants in California will be required to include service fees in menu prices rather than charging them separately.
The law, authored by Senators Nancy Skinner and Bill Dodd, prohibits businesses from imposing “junk fees” or obscuring additional costs to artificially lower prices. Attorney General Rob Bonta’s office confirmed that the law applies to restaurants and aims to ensure that consumers know the full cost of goods and services upfront.
While the legislation aims to bring transparency to pricing practices, it has sparked concerns within the food industry. Some fear that the law will have significant impacts on California’s restaurant industry, potentially leading to price increases for consumers and reduced wages for employees.
The California Restaurant Association has challenged the interpretation of the law, suggesting that it may have broader implications than initially intended. President Jot Condie expressed concerns about the potential effects on businesses and employees, emphasizing the need for clarity and understanding of the law’s scope.
This development follows the recent implementation of California’s fast-food law, which saw an increase in the minimum wage for fast-food workers from $16 to $20 per hour. The wage hike prompted adjustments in pricing by fast-food companies to offset rising labor costs.
