Newsom Signs Urgent Legislation to Exempt California Restaurants From Service Fees Ban

An emergency bill in California, signed into law by Gov. Gavin Newsom Saturday, will allow restaurants and bars to include fees and surcharges if they are disclosed to customers, providing relief from a bill passed in 2023 that went into effect July 1.

Last year’s bill, Senate Bill 478, made it illegal to impose hidden fees or surcharges in the dining industry as well as in transactions like concert ticket prices or hotel rooms.

However, concerns from California restaurants spurred the bill’s author, Democrat Sen. Bill Dodd, to write an emergency measure for that industry.

“The new proposal makes clear that any mandatory gratuity, service charge or other fee charged by restaurants must be displayed conspicuously on restaurant menus,” Mr. Dodd said in a June 24 press release.

The measure, Senate Bill 1524, also excludes grocery and delivery services, catering services, and food concession stands.


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