The Democrats are doing their best to destroy many industries with their tax policies as well as ridiculous legislation. The restaurant industry has been hit hard by the lack of thought in all Democrat laws.
With imminent legislative changes, California restaurants and bars have been granted the ability to continue implementing service charges and other surcharges, thanks to a new law signed just in time before older regulations could prohibit such practices. This decision comes as part of an emergency legislative action by Governor Gavin Newsom, who signed Senate Bill 1524 on Saturday. This bill provides an exemption for these establishments from the broader Senate Bill 478, which aims to curb hidden fees across various sectors including ticketing and travel, and was set to enforce more stringent pricing transparency starting in July.
Gov. Gavin Newsom signed a bill into law on Saturday that keeps surcharges on restaurant and bar checks in the state legal. Senate Bill 1524 will make restaurants exempt from another new state law banning “junk fees.” https://t.co/gJdTGi8BCe
— KTVU (@KTVU) June 30, 2024
The initial bill, SB 478, co-sponsored by Attorney General Rob Bonta, intended to eliminate hidden fees to ensure consumers knew the total cost of services upfront. However, it faced strong opposition from the restaurant industry, which argued that including mandatory costs in menu prices could deter customers during already challenging economic times marked by inflation and post-pandemic recovery challenges. Restaurants feared that increasing menu prices to cover costs like health benefits and equitable wage distribution could lead to decreased patronage and possibly force closures.
Senate Bill 1524, introduced earlier this June, allows restaurants to clearly list these additional charges without having to roll them into their menu prices. This approach aims to maintain transparency while allowing businesses to manage their financial burdens effectively. Advocates for the bill argue that these charges are essential for maintaining wage stability among staff, especially in establishments where tipping is customary for front-of-house staff but not for kitchen employees.
Shame on @GavinNewsom for signing this bill. We had a clear chance to get rid of restaurant nuisance fees and have price transparency.https://t.co/0Zfx31IMYD
— Adam Nash (@adamnash) June 30, 2024
Critics, however, remain skeptical about the necessity and transparency of these charges. Jenn Engstrom, state director of the California Public Interest Research Group, expressed concerns that restaurants are misleading customers by not including all costs in the displayed menu prices. She argued that this practice complicates price comparison and consumer decision-making, suggesting that it feels like a tactic to obscure the real cost of dining out.
Restaurant owner fears California minimum wage law is ‘a silent tax’ on consumers, ‘collapsing’ businesses. Gavin Newsom is destroying California. pic.twitter.com/I3SlmizGY8
— Lexit (@LexitMovement1) March 30, 2024
Despite these controversies, the new law has been welcomed by many in the hospitality industry. It is supported by significant industry players including the California Restaurant Association and the labor union Unite Here, which represent thousands of hospitality workers in the state. They argue that this bill will enable restaurants to better support their staff through increased pay equity and contributions to health care and other benefits, without sacrificing business viability.
Furthermore, some restaurant owners have already adjusted their pricing strategies in anticipation of the initial SB 478 guidelines, by including surcharges in their listed menu prices. These restaurateurs now face the decision of whether to revert to a separate fee model or continue with their current pricing structure. At the same time many have simply closed as the owners seek fairer states under Republican rule.
Major Points
- Governor Gavin Newsom signed Senate Bill 1524, allowing California restaurants and bars to continue adding service charges and other surcharges.
- The new law exempts these establishments from Senate Bill 478, which targets hidden fees and was set to enforce stricter pricing transparency.
- Critics argue that not including these costs in menu prices can mislead consumers, complicating price comparison and decision-making.
- The bill is supported by the California Restaurant Association and labor union Unite Here, citing benefits for pay equity and employee health care contributions.
- Some restaurateurs have integrated surcharges into their prices due to earlier guidelines and now face decisions on whether to separate these fees again.
Conner T – Reprinted with permission of Whatfinger News
