Cali Allow Restaurant Surge Charges

California’s restaurant scene is about to get a lot more transparent.

Governor Gavin Newsom has signed SB 1524 into law, ensuring that restaurants must clearly disclose any surcharges to their customers. This new legislation aims to enhance pricing transparency and prevent hidden fees that can surprise diners when the bill arrives.

SB 1524, which goes into effect on Monday, builds on last year’s SB 478. The earlier bill prohibited businesses from adding undisclosed fees at the end of transactions, targeting a wide range of industries, from online event tickets to lodging. However, there were ambiguities about its application to restaurant charges, prompting the introduction of this new law.

Senator Bill Dodd, who co-authored SB 1524 with Senator Nancy Skinner, emphasized the need for clarity in restaurant pricing. “If a restaurant adds a 20% service fee to the bill, it must be clearly stated on the menu and cannot be a surprise that only shows up when the bill arrives,” Dodd explained.

Senator Scott Wiener of San Francisco supported the bill, highlighting the importance of transparency while also recognizing the financial challenges faced by restaurants.

“Restaurants should be able to cover costs as long as they do so transparently,” Wiener said. “This bill strikes the right balance between supporting restaurants and delivering transparency for consumers.”

Under the new law, any mandatory fees and charges must be explicitly displayed on advertisements, menus, or any other form of display, along with an explanation of their purpose. This ensures that customers are fully informed before making a purchase, helping to avoid any unexpected charges at the end of their meal.

This move is part of a broader effort to protect consumers from hidden costs that can add up significantly. Senator Dodd noted that undisclosed charges in various transactions add billions of dollars in costs for California consumers each year. By requiring transparency in restaurant pricing, the new law aims to provide a fairer dining experience for all Californians.

As the law takes effect, diners can expect to see clear disclosures of any surcharges on menus, giving them a better understanding of their final bill. This change not only promotes honesty and transparency in the restaurant industry but also helps consumers make more informed decisions about where and how they choose to dine.


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