Those 3, 5 and 20% fees at the bottom of your menu may be here to stay. With little time to spare, a new law will allow restaurants and bars to continue paying service charges, health care costs and other surcharges when they are clearly listed for diners to see. This practice was set to be outlawed on July 1.
On Saturday, Gov. Gavin Newsom signed Senate Bill 1524, an emergency measure that would exempt California food and beverage vendors from Senate Bill 478: a law which takes effect at the beginning of the month and targets ticket sellers, hotel and travel websites and other businesses that pay “hidden” or “junk” fees. before Introducing SB 1524 in early June, restaurants and bars were included in the affected professions, with Atty. General Rob Bonta advises restaurants and bars to add surcharges to menu list prices to avoid the possibility of legal action.
“These fraudulent fees prevent us from knowing how much we will be charged from the beginning,” Atty. Gen. Rob Bonta, who co-sponsored SB 478, said in a statement the day it was signed. Bonta could not be reached for comment on SB 1524.
Many utility industry operators have been vocal against SB 478 since its passage in October, fearing that list price increases during a turbulent year marked by shutdowns and inflation it will only result in more lost customers and support. Multiple restaurants told the Los Angeles Times that the process of overhauling or completely overhauling their tip and surcharge system could result in the loss of staff benefits or outright closures. The passage of SB 1524 and the continuation of these surcharges could affect tens of thousands of restaurants across the state.
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“We’re the most regulated of any business out there, and we’re struggling to survive in the broken system that’s been handed down to us over many, many decades,” said Eddie Navarrette, a co-founder of the restaurant advocacy group Independent. Hospitality Coalition. “When you add more regulation, whatever it is, it makes things more difficult. Things are already tough… there is a mass exodus of our small restaurant community. I think it’s a huge relief, just to have one less thing thrown at them now.”
Navarrette spent weeks campaigning for the passage of SB 1524, writing letters, meeting with over 35 policy advisors, legislators or their representatives, knocking on doors at the State Capitol, and explaining the use of service fees within the industry. tip-based restaurants, which works. uniquely from most other areas that will be affected by SB 478.
Supplements, health fees, and service charges are regularly used within the industry to stabilize wages in dining rooms and kitchens — where servers often receive tips, but cooks and dishwashers do not — and to help offset the cost of benefits such as health care. . Businesses with larger service charges, such as 18% or 20%, often note that tipping is not expected.
“It’s confusing why restaurants claim they have to do things differently, because it just seems like they’re saying they have to hide the cost of their food from us, and that’s not fair,” Jenn Engstrom said. state director of the California branch of the Public Interest Research Group (CALPIRG). The non-profit organization protects the interests and protection of consumers. “It feels like you’re cheating, that’s what it feels like: that they’re trying to cheat you.”
Read more: Restaurants may be able to keep service charges if the menu shows the charges
Some local restaurants have fall under fire for alleged misuse of service charges or other surcharges, though multiple chefs and restaurateurs told the Los Angeles Times that these “bad actors” are few and far between.
“Every restaurant that I know that cares about this industry is using it in a way that is extremely appropriate and responsible and forward-thinking, so if it were to go away, it would be really crippling for everyone,” the restaurateur said. Kato Ryan Bailey. The Times earlier this year.
The new bill, which passed the state Assembly and Senate unanimously in late June, was co-authored by Sen. Bill Dodd (D-Napa) — who also co-authored SB 478 — as well as Sen. Scott Wiener (D- San Francisco ) and Assembly members Matt Haney (D-San Francisco), Jesse Gabriel (D-Encino) and Cecilia Aguiar-Curry (D-Winters).
It is supported by the California Restaurant Assn. and the labor union Unite Here, both of which represent thousands of hospitality workers in California.
“This [SB 1524] will enable restaurants to continue to support equal pay raises and make contributions to employee health care and other employee benefits,” Matthew Sutton of the California Restaurant Assn. said in a public statement. “And, more importantly, consumers will remain empowered to make informed choices about where they choose to eat out.”
While some restaurateurs and bar operators are heaving a sigh of relief at the continuation of service charges, others are frustrated with the government’s quick change of attitude.
According to the attorney general’s instructions for SB 478, in April restaurant Dustin Lancaster introduced a 4% surcharge on menu list prices from two of his LA restaurants, L&E Oyster Bar and El Condor. He said that in light of SB 1524, he won’t be returning to the fee-for-service model, at least for the foreseeable future, and that “it’s not that simple to un-bake the cake.”
“This is, unfortunately, very familiar territory for restaurants in California,” Lancaster told the LA Times this week. “Like in Covid, they pull us in and expect us to roll and change our model repeatedly like it’s no big deal for small businesses. Restaurants continue to close [at] An alarming rate in LA and this kind of unnecessary about-face is why California continues to be the least small business-friendly state in America.”
At Bell’s, a Michelin-starred restaurant in Los Alamos, ownership diligently tracked the progress of both Senate bills and awaited final word before determining whether to drop the 20% service charge, which benefits all non-service staff. managerial. Prior to the passage of SB 1524, Bell’s fare was already listed on the lunch and dinner menus, on the website’s FAQ page, and on the home page for purchase orders; the new law will allow the restaurant to continue its practice without reconfiguring its business model.
Greg Ryan, an owner of Bell’s, told The Times that he is listening to and understanding his customers, legislators and team, and that he wants to do what is best for his staff.
For months, the practice has felt like a balancing act.
As SB 1524 moved through the California Assembly and Senate, the outcry on social media and public forums like Reddit has been swift and loud, with many anonymous posters commenting that they will begin leaving 0% tips in retaliation to the exemption. . Another Reddit user was created a spreadsheet that tracks surcharges and service charges at restaurants across the state.
Read more: “Do you think tipping culture has gotten out of hand?” Inside our ongoing dilemma
One LA restaurateur, who asked to remain anonymous for fear of customer retribution, told The Times that they noticed an increase to $1.0% or other low tips during the month, possibly due to service charges 3 -4% charged at the restaurant.
“I’m not thrilled with the bill,” said Jenn Engstrom of CALPIRG. “I think it was better when restaurants and bars also had to have clear up front prices so consumers could do simple comparison shopping. When I decide to go out to a restaurant with my family, I check the prices first, on the menu, online.”
That SB 1524 requires clear posting is a benefit, she said, but it’s not as strong a bill as SB 478 with its initial guidance from the attorney general that called for the transfer of service charges to list prices. Engstrom called SB 478 “a great model bill” and would like to see similar consumer protection legislation in other states or federally — without much change for industries, regardless of how service charges affect their plans to business.
“I think so [SB 1524] Unfortunately it’s kind of a step back, but it’s still transparent,” she said. “You can still see it, you just have to do the math.”
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This story originally appeared in the Los Angeles Times.