California lawmakers accelerate restaurant exemption from hidden fee law – Marin Independent Journal

A bill that would make it easier for restaurants to set their food prices without taking additional fees into account is currently being rushed through the Capitol at full speed.

On Tuesday, two National Assembly committees approved the newly drafted Senate Bill 1524, which would exempt restaurants from a law passed last year that requires businesses to include any service, benefit or other charges in the prices they charge customers.

When SB 478 of 2023 was introduced, it was hailed as an important reform that would give consumers more attention to their final bills. Attorney General Rob Bonta, who introduced the bill, was particularly boastful.

“Today, California is eliminating hidden fees,” Bonta said in a joint statement with the authors. “These misleading fees prevent us from knowing up front how much we're being charged. They're bad for consumers and bad for competition. They cost Americans tens of billions of dollars every year. They hit families just trying to make ends meet the hardest.”

“With the signing of SB 478,” Bonta continued, “California now has the most effective law in the country to address this problem.”

Senator Bill Dodd, a Democrat from Napa and co-author of SB 478, agreed, saying, “With the governor signing this historic bill, we can finally crack down on dishonest junk fees that seem to be tacked on everything from online concert tickets to hotel reservations.”

SB 478 takes effect on July 1. But a few weeks ago, Bonta's office issued a warning that restaurants would have to comply with the new law. Restaurant owners and unions responded by claiming they assumed their additional fees would be exempt.

Dodd quickly took up the bill filed in the House, SB 1524, removed the language it contained and inserted new language that would allow restaurants to exclude fees from their menu prices if their menus contain “clear and conspicuous” notices of the existence of such fees.

Diners would therefore have to search menus for such warnings – yet SB 1524 would give restaurants an additional year to include the relevant notices on their menus.

Lobbyists and restaurant union representatives claim that SB 478 would effectively eliminate negotiated service charges, depriving employees of income. But this is a flimsy argument. The new law contains no provisions preventing restaurants from including fees in their posted prices and using the revenue for the same purpose it is used for now.

The real reason the industry opposes the new law is fear that revealing total prices will discourage customers from eating out. In other words, they want to continue their bait-and-switch tactics with the blessing of lawmakers.

Anna Harden

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