California bill seeks to allow restaurant service fees
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San Francisco restaurants may be able to continue imposing service fees, mandatory gratuities and other charges — as long as they are transparent about them — under a new bill that seeks to provide an exemption to a controversial law going into effect July 1.
Why it matters: The law, approved by lawmakers last year, requires businesses like online ticket sellers and lodging providers to fold service fees and other charges into the advertised price.
- Restaurant owners have argued it would result in employee pay cuts and higher menu prices for diners.
Driving the news: Sens. Bill Dodd and Scott Wiener and other state lawmakers introduced legislation, Senate Bill 1524, last week seeking an exemption that would allow restaurants to keep charging so-called junk fees as long as they are transparent about them.
- "It cannot be a surprise that only shows up when the bill arrives," according to a press release from Dodd's office.
What they're saying: "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," Wiener said in a written statement.
- SB 1524, he added, clarifies portions of the new law "that pose a serious threat to restaurants."
- Matthew Sutton, a legislative director with the California Restaurant Association, said the new bill would enable restaurants to "continue to support increased pay equity and to make contributions to worker health care and other employee benefits."
The other side: If the bill passes, consumers who have complained about surcharges may not be happy.
- Last month, the San Francisco Standard highlighted a San Francisco resident who has spent thousands of dollars in court filing fees suing over restaurant surcharges.
What's next: The bill needs approval from the Senate, the Assembly and Gov. Gavin Newsom quickly, since the deadline for new bills has already passed, the San Francisco Chronicle reports.
- Since it's labeled an urgency measure, which requires a two-thirds vote instead of a majority vote, it would take effect immediately if approved.