A new law in California mandates that restaurants must clearly disclose any surcharges to customers. Governor Gavin Newsom signed Senate Bill 1524 into law on Saturday, aiming to make restaurant pricing more transparent.
The new law does not prohibit restaurants from adding service charges, but it does require them to clearly display any mandatory fees along with an explanation of their purpose. This information must be included on advertisements, menus, or any other displays where prices are shown.
Starting Monday, the new law builds on Senate Bill 478, which was introduced by Senator Bill Dodd and Senator Nancy Skinner. SB 478 prevents all businesses from adding hidden fees at the end of transactions. Senator Dodd explained that this previous bill targeted hidden charges on purchases like online event tickets and lodging, which can cost California consumers billions of dollars.
Despite this, there was confusion about how the earlier bill applied to restaurant charges. This led Senator Dodd to introduce SB 1524 as an urgency measure to provide clear guidelines specifically for restaurants.
Under the new law, if a restaurant adds a 20% service fee to a bill, it must be clearly stated on the menu. This means customers won't be surprised by additional charges when they receive their bill.
Senator Scott Wiener, who represents San Francisco, supported the bill, stating that restaurants should be able to cover their costs as long as they do so transparently. He believes the new law strikes a balance between supporting restaurants and ensuring transparency for consumers.
