The 3%, 5% and 20% fees at the bottom of the menu are likely to remain. Time is running out, and a new law will allow restaurants and bars to continue charging service charges, medical fees and other surcharges, clearly listed for diners to see. The practice will be outlawed on July 1.
Saturday, Governor Gavin Newsom signs Senate Bill 1524, an emergency measure that will exempt California food and beverage vendors from Senate Bill 478: A Law The bill, which takes effect early this month, targets ticket sellers, hotel and travel websites and other businesses that charge “hidden” or “junk” fees. Before SB 1524 launched in early JuneAffected occupations include restaurants and bars, among which are lawyers. Gen. Rob Bonta recommended that restaurants and bars build the surcharge into menu prices to avoid the possibility of legal action.
“These deceptive fees prevent us from knowing how much we will be charged initially,” Atty said. Gen. Rob Bonta, co-sponsor of SB 478, said in a statement on the day of the signing. Bonta could not be reached for comment on SB 1524.
Since SB 478 passed in October, many service industry operators have been outspoken in their opposition to the bill, fearing that A tumultuous year marked by factory closures and inflation It will only lead to more loss of customers and support. Multiple restaurant owners told the Los Angeles Times that the process of modifying or overhauling their tip and surcharge systems could result in a loss of employee benefits or total closures. The passage of SB 1524 and the continuation of these surcharges could impact tens of thousands of restaurants across the state.
Eddie Navarrette, co-founder of restaurant advocacy group The Independent, said: “We are the most regulated of all businesses and we struggle with the broken system that has been handed to us for decades. “When you add more regulations, whatever they are, it makes things more difficult. Things are already difficult… We’ve had a massive exodus from our small restaurant community. I think there’s one less thing to do now.” thing, which is a huge relief for them.
Navarrete spent weeks campaigning for the passage of SB 1524, writing letters, meeting with more than 35 policy advisers, legislators or their representatives, going door-to-door at the state Capitol, and explaining the importance of tipped service in the restaurant industry The industry’s role is different from most other areas affected by SB 478 depending on how the fees are used.
The industry often uses surcharges, medical fees and service charges to stabilize wages in restaurants and kitchens — servers often receive tips, but cooks and dishwashers do not — and to help offset the cost of benefits like health care. Businesses with higher service charges (such as 18% or 20%) will often notice that no tip is required.
“It’s confusing why restaurants are saying they need to do things differently because it feels like they’re saying they need to hide food costs for us, and that doesn’t feel right,” said Jenn Engstrom, Public Interest Research Group (CALPIRG) California State Director of the Chapter. The nonprofit organization advocates for consumer interests and protections. “It feels like you’re being lied to, and that’s what it feels like: They’re trying to lie to you.”
Some local restaurants have being attacked There are alleged abuses in charging service charges or other surcharges, although multiple chefs and restaurateurs told the Los Angeles Times that these “bad actors” are rare.
“Every restaurateur I know who cares about this industry is using it in a very appropriate, responsible and forward-thinking way,” said Kato restaurant owner Ryan Bailey. It can cause serious damage to an individual.
The new bill, which passed unanimously in the state Assembly and Senate in late June, was led by Sen. Bill Dodd, D-Napa, and SB 478 co-author Sen. Scott Wiener. ) co-drafted. ).
It has the support of the California Restaurant Association. and union Unite Here, both of which represent thousands of hotel workers in California.
“this [SB 1524] will allow restaurants to continue to support increased wage equity and contribute to worker health care and other employee benefits,” Matthew Sutton of the California Restaurant Association. said in a public statement. “And, importantly, consumers will continue to have the power to make informed choices about where they eat out.”
While some restaurateurs and bar operators are relieved to continue charging service charges, others are frustrated by the government’s swift change of tack.
In April, L&E Oyster Bar and its sister restaurant El Condor incorporated a 4% service charge into menu prices ahead of SB 478’s July 1 deadline.
(Ricardo de Alatanha/Los Angeles Times)
Under the guidance of the Attorney General’s SB 478, restaurateur Dustin Lancaster in April A 4% surcharge is added to the menu price His two restaurants in Los Angeles are L&E Oyster Bar and El Condor. He said that in light of SB 1524, he would not return to the service fee model, at least for the foreseeable future, and that “it’s not that simple to just take away the cake.”
“Sadly, this is all-too-familiar territory for restaurants in California,” Lancaster told the Los Angeles Times this week. “Just like during COVID-19, they’re moving us around and expecting We repeatedly tweaked and changed our model as if it was no big deal to small businesses as restaurants continued to close. [at] Los Angeles’ staggering rates and this unnecessary shift are why California remains the least friendly state to small businesses in the country.
At Bell’s, a Michelin-starred restaurant in Los Alamos, owners are diligently tracking the progress of two Senate bills, awaiting a final decision before deciding whether to eliminate the 20 percent service charge, which would benefit all non-management employees. Prior to the passage of SB 1524, Bell’s charges were already listed on lunch and dinner menus, on the website’s FAQ page, and on the home page related to to-go orders; the new law would allow restaurants to continue operating without having to restructure their business models.
Greg Ryan is the owner of Bell Corporation, tell the times He’s listening and understanding his customers, legislators, and team, and he wants to do what’s best for his employees.
For months, this approach felt like a balancing act.
As SB 1524 passed the California Assembly and Senate, the outcry on social media and public forums like Reddit was fast and furious, with multiple anonymous posters commenting that they would start leaving 0% tips in retaliation for this exemption . Another Reddit user created spreadsheet Track surcharges and service charges at restaurants across the state.
One Los Angeles restaurateur, who requested anonymity for fear of customer retaliation, told the Times they had noticed an increase in tips of $1, 0% or other low tips during the month, possibly due to restaurants charging a 3-4% service charge.
“I’m not happy with this bill,” said Jenn Engstrom of CALPIRG. “I think it would be better for restaurants and bars to also have very clear upfront pricing so consumers can easily do comparison shopping. When I decide to go to a restaurant with my family, I check the prices on the menu and online first .
SB 1524’s requirement for clear disclosure is a benefit, she said, but not as strong as SB 478’s bill because the attorney general’s initial guidance called for service fees to be included in the list price. Engstrom called SB 478 “a great model bill” and hopes to see similar consumer protection legislation in other states or federally — one that wouldn’t place too many restrictions on the industry regardless of how service fees are built into their business plans.
“I think this [SB 1524] Unfortunately, it’s a bit regressive, but it’s still transparent,” she said. “You can still see it, you just have to do the math.”
