Starting from July 1st, any restaurant in California adding special surcharges to customer bills will become an illegal practice.
As reported by FOX11, the upcoming California new law SB478, which will take effect from July, prohibits businesses from charging consumers undisclosed fees, including additional fees related to online purchases such as concert tickets and room reservations.
The “Surcharge Disclosure Law” applies to all additional fees, including service charges, dine-in fees, delivery fees, credit card processing fees, and even mandatory tips, excluding sales tax; the specific provisions are still unclear.
California Attorney General Rob Bonta’s office confirmed to the San Francisco Chronicle on April 30th that the new law will also apply to restaurant surcharges, which are often mistaken by customers as tips or taxes but are used to cover additional expenses, including employee healthcare or credit card processing fees.
Bonta had previously stated that restaurants are allowed to charge surcharges, but he pointed out that these fees must be disclosed in advertising, which naturally includes menus.
This law will have a significant impact on the restaurant industry, as charging surcharges has become a common method for restaurants to reduce costs and increase employee income.
The California Restaurant Association has prepared for pushback, stating that this statutory law only applies to advertising, as the court has ruled that the term “advertising” for goods and services does not cover menus.
In Walnut Creek, many diners believe that surcharges should be included in the price of food.
Susan Bomba said, “Yes, it (surcharge) should be included in the price of the food. It would help people ordering.”
In fact, many people feel that tipping, fees, and surcharges have gotten out of control.
Bob Kennedy said, “I totally agree. Like I said, I’ve been to restaurants before, left a big tip, then realized later, the tip was already included.”
Susan Bomba added, “Now, even for takeout, you’re supposed to tip. It wasn’t like this before. During the pandemic, I didn’t mind, but now that we’re back to normal, we still have to tip for takeout.”
Meanwhile, some restaurant owners express the need for clear, specific answers quickly as the related regulations are set to take effect in two months.