Bay Area/ San Francisco/ Food & Drinks
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Published on May 01, 2024
New California Law Outlaws Restaurant 'Junk Fees,' Spurs Menu Price Revamp Starting July 1Photo by Jessie McCall on Unsplash

Get ready to fork over a few more bucks for your grub. California restaurants will have to charge bake service fees to their menu prices starting July 1, according to a new state law.

With the enactment of SB 478, the annoying extra costs tacking onto your dining bill, mysteriously dubbed "junk fees," are set to be outlawed. The legislation, pushed through by the California attorney general's office and Bay Area legislators, Sen. Nancy Skinner and Sen. Bill Dodd, sends shockwaves through the food service industry. As reported by SFist, restaurateurs are bracing for the blowback as the traditional tipping model stages a comeback, and menu prices are anticipated to spike.

These surcharges weren't just a nickel-and-dime act; they've been part of San Francisco's dining scene for over 15 years, initially cropping up as a defiance against mandated employer-paid healthcare. Ahead of the game, SFist pointed out that places like Che Fico and Good Good Culture Club have already adjusted their pricing structure, eliminating controversially added surcharges such as the 10% "dining in" fee.

"It is terrifying," divulged Tim Stannard of Bacchus Management Group to the San Francisco Chronicle, describing the state's move as a ticking time bomb for the restaurant industry. The group foresees a potential hit to the wages they can pay without these additional charges. With their backs up against the wall, restaurants will likely revert to the much-debated tipping model and increase prices sharply to avoid financial implosion.

But it's not all doom and gloom for consumers who've been vocal in their disdain for the extra fees. A survey by the San Francisco Chronicle revealed that diners, while concerned about climbing menu costs, prefer straightforward billings without surprises. Restaurants are now expected to include all costs upfront in the menu prices, a transparency push that's got both owners and patrons on the edge of their seats.

Though intended to eliminate confusion and unexpected charges, the ban has its critics and advocates at odds over the future of how restaurants do business. With looming threats of class-action lawsuits against establishments that cling to old surcharge habits, the industry faces a "death sentence" for independent venues, shared by the proprietor of Bacchus Management Group. In a peculiar turn of events, delivery apps trailblazing the digital dining age, such as DoorDash and Uber Eats, have managed to secure an exception allowing them to continue slathering on service fees.