Starting July 1, a new California law will prohibit restaurants and other businesses from charging their customers “junk fees.”
Senate Bill 478 will eliminate hidden fees on purchases across California, including those related to online sales such as concert tickets and food delivery. Restaurant surcharges will also be banned, according to the Attorney General’s Office.
But what about the required tips?
A reader asked our journalists from How To California – a new community-driven series that helps readers navigate life in the Golden State: Are restaurants allowed to charge an additional tip for large groups?
Here’s what we know:
Can restaurants charge extra for dining in a large group?
“SB 478 is a price transparency law,” the California Attorney General’s Office wrote in an email to The Sacramento Bee.
If a restaurant requires a mandatory tip for a certain number of guests, this must be included in the menu prices, according to the Attorney General’s Office.
“By law, a restaurant may not charge an additional surcharge on top of the list price,” the office said in an FAQ.
This also includes tips that are “not voluntary”.
According to the provisions of the draft law, the prices of goods and services must include all charges that the consumer has to pay.
“For example, if a burger costs $10 and the restaurant charges a 15 percent service charge, the burger would have to be listed at $11.50,” the office wrote.
The California Restaurant Association has disputed claims that the bill would not impact restaurant operations across the state – and “strongly disagrees with the Attorney General’s broad interpretation of the law to prohibit restaurant service fees,” said Matthew Sutton, senior vice president for government affairs and public policy, in a May press release.
The association is examining ways to prevent the implementation of the new law in its current interpretation, the statement said.
“Neither the clear wording of the bill nor the debate in Parliament indicate any intention to change the pricing structure for every restaurant in this state,” Sutton said.
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