California Restaurants to Maintain Service Fees
Late on Saturday night, Governor Gavin Newsom of California took swift action by signing emergency legislation that provides an exemption to restaurants from a new law scheduled to come into effect on July 1. The legislation, which was enacted in 2023, aimed to eradicate what was termed as “junk fees.” However, the recent legislation signed by Newsom allows restaurants to maintain surcharges, provided they openly disclose any additional charges.
Senator Bill Dodd of Napa emphasized, “We have made it explicitly clear that restaurants cannot modify these charges without prominently displaying them in a clear and concise manner on the menu, ensuring that there are no unexpected surprises when customers receive their bill.”
Upon the initial enactment of the law, the California Restaurant Association (CRA) vehemently opposed it, contending that it should not be applicable to restaurants as menu items do not fall under the category of “goods” or “services” as delineated in California’s civil code. Despite the allowance for establishments to retain the surcharge, some consumers have expressed their acceptance of it.
Jarrett Powers from San Jose remarked, “I view the continued presence of the surcharge as a positive measure, as it is intended to benefit workers, or at least it should be directed towards them, which I find acceptable.” Additionally, certain consumers have conveyed their appreciation for the transparency brought about by this legislation.
Restaurants are granted a period of one year to ensure that the notification of the service fee is conspicuously displayed on menus and aligns with the stipulated legal definitions. This grace period allows for establishments to adapt to the new regulations and uphold the required standards of transparency and disclosure to their patrons.
