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HomeFoodDoes California’s ‘Junk Charge’ Legislation SB 478 Ban Restaurant Service Costs?

Does California’s ‘Junk Charge’ Legislation SB 478 Ban Restaurant Service Costs?

Welcome to Ask Eater, a column from Eater SF the place the positioning’s editors reply tough eating questions from readers and buddies. Have a query for us? E mail [email protected].

Hey Eater SF,

I used to be questioning if you happen to knew in regards to the new junk charge invoice that was signed into legislation over the weekend. It’s just a little bit imprecise with regard to eating places, however are you aware if necessary service adjustments and costs together with these for giant events can be allowed underneath the brand new legislation?

Thanks,

Unsure About Service Charges


Hey Unsure About Service Charges,

First, for many who aren’t acquainted, right here’s some background. On Saturday, October 7, Gov. Gavin Newsom signed Senate Invoice 478 into legislation. It’s been colloquially known as a ban on “junk charges,” these annoying and generally exorbitant charges most frequently related to issues like live performance tickets and resort stays. And for what it’s price, it’s not simply California trying to eliminate these expenses; on Wednesday, President Biden introduced a proposed rule that may equally ban “hidden and bogus” charges nationwide.

The California legislation received’t go into impact till July 1, 2024, and it’s particularly supposed to stop companies from being misleading in regards to the last price of a services or products. In a press launch, California Lawyer Common Rob Bonta, who sponsored the invoice, says the legislation prohibits “charges by which a vendor makes use of an artificially low headline value to draw a buyer and often both discloses extra required charges in smaller print or reveals extra unavoidable expenses later within the shopping for course of.”

This brings us again to the unique query: Would a restaurant service charge rely as a “junk charge”?

The quick reply is it may. A spokesperson for the Lawyer Common’s workplace confirmed on Friday afternoon that every one companies can be topic to the brand new legislation — together with eating places. So whereas eating places aren’t particularly talked about within the laws, and although they’re not essentially the primary goal of the legislation, the scope of the definition of “junk charges” would come with restaurant and bar service charges.

However that doesn’t imply eating places and bars received’t have the ability to cost these charges — whether or not the surcharge goes towards worker healthcare or features as a gratuity (allegedly, no less than). “SB 478 is an promoting legislation — not a pricing legislation — so companies are free to set their very own costs and use the cash nonetheless they select so long as customers know from the beginning what the worth can be,” the Lawyer Common’s spokesperson writes. “Merely put, the worth Californians see would be the value they pay.”

Meaning eating places, like all companies within the state, will simply want to verify they’re disclosing any surcharges or service charges to clients clearly and earlier than the ultimate invoice hits the desk. Meaning disclosing any necessary expenses on menus — each in print and on-line, if that applies — and upfront. In an e mail to members, San Francisco’s restaurant foyer the Golden Gate Restaurant Affiliation had this recommendation: “It can be crucial that every one menus and all technique of gross sales (on-line menus /ordering) ought to embody the service cost language in readable font. Clients ought to by no means be stunned by an extra cost.”

It’s but to be decided what enforcement of the brand new legislation will seem like however so long as eating places and bars are being upfront about what charges clients pays, they need to be clear to proceed charging them.

Replace: October 13, 2023, 3:57 p.m. This text was up to date to incorporate info from Lawyer Common Rob Bonta’s workplace.

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