So, Restaurant Fees Could Still Be Legal After All

There seems to be no end to the restaurant surcharge and junk fee ban saga. The latest in the legal back and forth, however, is a new piece of legislation introduced Thursday, June 6. The Chronicle reports Senator Bill Dodd, D-Napa, is behind Senate Bill 1524 which would keep restaurant fees legal so long as they present additional fees “clearly and conspicuously.” In other words, how the majority of food purveyors in the state already operate, be it on menus, online, or in reservation notices.

The paper writes this legislation is meant to specifically clarify State Bill 478, a “junk fee ban” outlawing undisclosed fees from rental car dealers and ticket sellers to concerts alike. On July 1, 2024, that law will go into effect, and it was unclear why restaurant owners were roped into this bill as many already explain to diners and consumers which fees — be it the SF Mandate fee or gratuity for groups of eight or more — are accounted for on the bill.

Dodd, who also co-authored SB 478, told the Chronicle too many restaurants are not upfront about fees, which is why they were included in the original bill. The new legislation makes clear any “restaurant, bar, or other food service provider” is subject to these changes. “This proposal will level the playing field for all restaurants,” Dodd told the outlet, “and address confusion and disagreement about what is permissible under state law.”

In October 2023, lawmakers spoke to Eater SF to indicate the intended bill was aimed at airlines, hotels, and ticket sale companies, not specifically restaurants. Notably, Governor Gavin Newsom made space in the original bill to exempt delivery businesses including DoorDash and Uber Eats. Senator Scott Wiener, D-San Francisco, who co-authored the new bill, said in a press release that restaurants should not be punished so long as they are transparent with customers. The urgency measure-labeled bill, known as a gut-and-amend law, has to speed-run through both the state Senate and Assembly before Newsom can approve.

This update comes after months of nail-biting by industry professionals. Restaurant stakeholders reached out to lawmakers to express concern and confusion regarding the implementation of SB 478 since its passage. “It could put people out of business immediately,” Golden Gate Restaurant Association President Laurie Thomas told Eater SF in early May.