Sen. Dodd Introduces Restaurant Fees Bill

SACRAMENTO – Sen. Bill Dodd, D-Napa, introduced legislation today to enhance consumer protection for California restaurant patrons by clarifying state law on the disclosure of hidden fees and other service charges.

“Restaurant customers shouldn’t be surprised when they get their checks by a slew of extra charges they were not expecting,” Sen. Dodd said. “Many restaurants are up-front with their business practices but too many aren’t, necessitating action. This proposal will level the playing field for all restaurants and address confusion and disagreement about what is permissible under state law.”

Last year, Gov. Gavin Newsom signed Sen. Dodd’s Senate Bill 478, which bars businesses of all types from adding undisclosed fees at the end of transactions. SB 478 applied to the proliferation of the hidden charges on purchases such as online event tickets, lodging and other transactions that add billions of dollars in costs for California consumers. The law takes effect July 1.

In response to questions about how the new law applies to restaurant charges, Sen. Dodd is introducing an urgency measure, Senate Bill 1524, which could be adopted within the next month. The new proposal makes clear that any mandatory gratuity, service charge or other fee charged by restaurants must be displayed conspicuously on restaurant menus. For example, if a restaurant adds a 20% security fee to all bills, that 20% charge must be clearly stated up front on the menu. It cannot be a surprise that only shows up when the bill arrives.

SB 1524 is co-authored by Sen. Scott Wiener, D-San Francisco, and Assemblymember Jesse Gabriel, D-Encino. It is supported by the California Restaurant Association and the Unite Here labor union.

“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,” said Sen. Scott Wiener, D-San Francisco. “SB 1524 clarifies portions of the law that pose a serious threat to restaurants. The bill strikes the right balance between supporting restaurants and delivering transparency for consumers, and I’m proud to support it.”

“The California Restaurant Association strongly supports SB 1524, which will allow restaurants to continue to impose service charges, mandatory gratuities, and other common menu charges, provided the charges are clearly and conspicuously disclosed in advance to restaurant patrons,” said Matthew Sutton of the California Restaurant Association. “This will enable restaurants to continue to support increased pay equity and to make contributions to worker health care and other employee benefits.  And, importantly, consumers will remain empowered to make informed choices about where they choose to dine out. We are pleased to join Unite HERE in supporting this important measure.”

“Cutting the pay of banquet servers and ballpark workers was never the intention of SB 478, as the bill’s authors have made clear,” said Mario Yedidia, western political director for UNITE HERE. “UNITE HERE is proud to cosponsor this amendment, and to protect and improve the standard of hotel, food service and casino workers across California.”

Senator Bill Dodd represents the 3rd Senate District, which includes all or portions of Napa, Yolo, Sonoma, Solano, Sacramento and Contra Costa counties. More information on Senator Bill Dodd can be found at www.senate.ca.gov/dodd

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