California’s New Law on Hidden Fees Faces Opposition from Restaurant Owners
Last fall, Gov. Gavin Newsom signed legislation in California that aimed to crack down on businesses adding hidden fees to their listed prices. The law, set to take effect on July 1, would make it illegal for businesses to tack on fees like “resort fees” at hotels or service charges on concert tickets.
Supporters of the law praised it as a way to protect consumers from deceptive pricing practices. State Attorney General Rob Bonta called it the most effective piece of legislation in the nation to address the issue.
However, as the implementation date approaches, some businesses are pushing back against the new law. Restaurant owners argue that they should be exempt from the legislation, citing the challenges they already face in a competitive market.
Many restaurants currently charge additional fees on top of their menu prices, such as service charges or health insurance fees for employees. The new law would require these costs to be included in the listed prices, potentially raising menu prices and impacting businesses’ profit margins.
In response to the concerns raised by restaurant owners, State Senator Bill Dodd introduced a new bill, S.B. 1524, that would exempt restaurants, bars, and other food service providers from the requirements of the original law. The bill would allow these businesses to charge mandatory gratuities or other fees as long as they are clearly displayed on the menu.
Supporters of the new bill argue that it strikes a balance between supporting restaurants and providing transparency for consumers. State Senator Scott Wiener emphasized the importance of allowing restaurants to cover their costs transparently while maintaining the integrity of the new law.
As the debate continues, the fate of California’s new law on hidden fees remains uncertain. Restaurant owners and lawmakers are working to find a solution that benefits both businesses and consumers in the state.
