Assembly Approves Sen. Dodd’s Restaurant Fees Bill

SACRAMENTO – The California Assembly today approved legislation from Sen. Bill Dodd, D-Napa, to protect California restaurant patrons from hidden fees, by tailoring upfront disclosure requirements to the food services industry.

“This measure achieves the goal of providing consumers with up-front price transparency without inadvertently harming food service workers or small businesses,” Sen. Dodd said. “Clear, conspicuous disclosure of any fee, and a description of its purpose, would be required on all advertisements, menus or other displays that contain the price of a food or beverage item. It ensures restaurant customers are not shocked when they get their checks.”

Last year, Gov. Gavin Newsom signed Sen. Dodd’s Senate Bill 478, which bars businesses of all types from adding undisclosed fees at the end of transactions. SB 478 applied to the proliferation of the hidden charges on purchases such as online event tickets, lodging and other transactions that add billions of dollars in costs for California consumers. The law takes effect July 1.

In response to questions about how the new law applies to restaurant charges, Sen. Dodd wrote an urgency measure, Senate Bill 1524, which could be adopted by July 1. The new proposal makes clear that any mandatory gratuity, service charge or other fee charged by restaurants must be displayed conspicuously on restaurant menus. For example, if a restaurant adds a 20% service fee to all bills, that 20% charge must be clearly stated up front on the menu. It cannot be a surprise that only shows up when the bill arrives.

SB 1524 is co-authored by Sen. Scott Wiener, D-San Francisco, and Assemblymembers Jesse Gabriel, D-Encino, Cecilia Aguiar-Curry, D-Winters and Matt Haney, D-San Francisco. It is supported by Lt. Gov. Eleni Kounalakis, the California Restaurant Association and the Unite Here labor union. The bill was approved by the Assembly in a bipartisan 63-0 vote.

“SB 1524 strikes the right balance between strengthening transparency for consumers and providing restaurants with clarity and flexibility in how they cover their costs,” said Lt. Gov. Eleni Kounalakis. “I am proud to cosponsor SB 1524, which will bring much-needed clarity to how state law applies to restaurant fees by requiring restaurants, bars, and other food service providers to clearly and conspicuously disclose any service charge, mandatory gratuity, or other mandatory fee to consumers on advertisements, menus or other displays.”

“Restaurants are vital to the fabric of life in California, and they should be able to cover costs as long as they do so transparently,” said Sen. Scott Wiener, D-San Francisco. “SB 1524 clarifies portions of the law that pose a serious threat to restaurants. The bill strikes the right balance between supporting restaurants and delivering transparency for consumers, and I’m proud to support it.”

“The California Restaurant Association strongly supports SB 1524, which will allow restaurants to continue to impose service charges, mandatory gratuities, and other common menu charges, provided the charges are clearly and conspicuously disclosed in advance to restaurant patrons,” said Matthew Sutton of the California Restaurant Association. “This will enable restaurants to continue to support increased pay equity and to make contributions to worker health care and other employee benefits.  And, importantly, consumers will remain empowered to make informed choices about where they choose to dine out. We are pleased to join Unite HERE in supporting this important measure.”

“Cutting the pay of banquet servers and ballpark workers was never the intention of SB 478, as the bill’s authors have made clear,” said Mario Yedidia, western political director for UNITE HERE. “UNITE HERE is proud to cosponsor this amendment, and to protect and improve the standard of hotel, food service and casino workers across California.”

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Senator Bill Dodd represents the 3rd Senate District, which includes all or portions of Napa, Yolo, Sonoma, Solano, Sacramento and Contra Costa counties. More information on Senator Bill Dodd can be found at www.senate.ca.gov/dodd.