Should Hidden Fees & Surcharges At Restaurants Be Illegal?

The bill has already been met with pushback from those in the restaurant community.

If pesky service charges at restaurants stress you out, have you considered a summer trip to California?

A new bill will soon go into effect that will make restaurant surcharges, including service fees and other hidden “junk fees,” illegal in the state of California.

Authored by Sen. Nancy Skinner and Sen. Bill Dodd, and sponsored by State Attorney General Rob Bonta, SB-478 will go in effect on July 1, according to Los Angeles news station ABC 7. The law was created to target “deceptive fees” that prevent customers from knowing what they will be charged when dining out.

“They are bad for consumers and bad for competition. They cost Americans tens of billions of dollars each year. They hit families who are just trying to make ends meet the hardest. And, because a growing list of websites, apps, and brick-and-mortar businesses are using them, they penalize companies that are upfront and transparent with their prices,” read a statement from the state government released in October.

Although the prospect of a service charge-free summer (and beyond) likely sounds quite exciting to diners, it could bring about other, less enticing changes at restaurants. With no option for service fees, restaurants could increase menu prices across the board.

Additionally, most restaurants use service fees to provide workers with a higher hourly wage, paid sick time, and other benefits. Without the additional revenue from service fees, those benefits could start to disappear.

“All of that goes away because you can’t pay that high of an hourly rate unless you charge a service charge. You’re basically reverting back … now you’re hustling for tips,” restaurant owner Ryan Cole shared with Eater.

Would you prefer no service fees whatsoever the next time you dine out, or should we listen to the restaurant industry and keep the fees in place?