By Lori Weisberg / The San Diego Union-Tribune / June 29, 2024
San Diego restaurateurs, who had been fretting for months about the prospect of having to stop tacking surcharges onto diners’ bills to help cover rising costs, have gotten an 11th-hour reprieve.
With just two days to go before a new law barring so-called junk fees was to go into effect, Gov. Gavin Newsom on Saturday [June 29] signed emergency legislation that will free California restaurants from what would have been an effective ban on surcharges that drinking and dining venues have been using for years to help defray costs largely related to rapidly rising wages and health care benefits.
At issue was a state bill, Senate Bill 474, that is designed to combat hidden fees levied by a variety of businesses, from ticket sales vendors and delivery apps to restaurants and hotels. But it was the automatic restaurant service charges that received the most attention.
One of the bill’s co-authors, Bill Dodd, D-Napa, had previously said he never intended his bill to encompass restaurant surcharges. But a recent set of guidelines released by the state Attorney General’s Office concluded that the bill clearly applied to dining venues unless the added fees — typically 3 percent to 6 percent in San Diego — were incorporated into the cost of each menu item.
The net effect, said Attorney General Ron Bonta, is to eliminate “bait and switch tactics” so consumers are aware upfront what the total cost is for a good or service they’re purchasing.
“The law is simple,” he said last month. “The price you see is the price you pay,” Bonta said. “Laws work when everyone can comply.”
Dodd jumped into action, introducing emergency legislation that would specifically exempt restaurants and bars from SB474 by simply requiring them to disclose upfront any additional fees “clearly and conspicuously” on menus or “other displays,” something they were already doing.
“Restaurant customers shouldn’t be surprised when they get their checks by a slew of extra charges they were not expecting,” Dodd said earlier this month when his bill, SB1524, was introduced. “Many restaurants are upfront 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.”
The bill unanimously passed both the state Assembly and Senate this week and had been awaiting Newsom’s signature before the July 1 effective date of the junk fee law.
Restaurateurs had been preparing to comply with the law, rewriting menus and raising menu prices by a few percentage points to help offset the loss of dependable revenue from the surcharges, which admittedly, have not been especially popular with diners.
Ironically, some San Diego restaurateurs are deciding to ditch the surcharges altogether, having already moved forward with incorporating the added fee into individual items on their menus.
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Looks like the restaurant lobby is just too big to ignore, eh Gavin?
Eat better. Cook at home.
Bad enough looking at the menu and then keeping in mind to look for added fees within the menu. People need to be more vocal when this happens and call out managers to respectfully make that point.