California Governor Gavin Newsom signed an emergency bill last Sunday, June 30th, allowing restaurants and bars to charge additional fees and service charges with clear disclosure to customers. This serves as an emergency supplemental amendment to the SB478 bill that came into effect on July 1st.
Last year, the California Senate passed the SB478 bill, which prohibited hidden additional fees or service charges in accounts related to the food and beverage industry, concert tickets, hotel rooms, and others.
However, concerns within the California restaurant industry prompted the proposer, Democratic Senator Bill Dodd, to draft an emergency bill specifically for this industry, known as the State Senate Bill SB1524.
In a press release on June 24th, Dodd stated, “The new bill (SB1524) specifies that restaurants must prominently display any mandatory tips, service charges, or other fees on their menus.”
SB1524, however, does not apply to grocery and delivery services, catering services, and food vendors.
The California Restaurant Association (CRA) opposed SB478, criticizing that the bill could lead to legal confusion and “disrupt restaurant operations statewide.” The association views the signing of the emergency bill as a victory and expressed gratitude to lawmakers for clarifying texts related to the food industry.
CRA provides support to the California restaurant industry through promotion and corporate membership services. Matthew Sutton, Senior Vice President of Government Affairs and Public Policy at the association, mentioned, “The California Restaurant Association appreciates the legislature and the governor for passing and signing SB1524, recognizing the need for flexible pricing models in restaurants and food service businesses.”
Sutton noted that SB1524 would benefit restaurant workers, as many restaurants have shifted to a service charge model, not only ensuring fair compensation for employees but also supporting additional benefits.
The association highlighted that in California, this model is becoming a trend to fund non-mandatory benefits for employees.
Senator Dodd did not respond to requests for comments from a reporter of Epoch Times. ◇