California Governor Gavin Newsom has signed a new law, SB 1524, which requires restaurants to disclose any mandatory fees and charges to customers. The law, effective immediately, builds on a previous law, SB 478, which aimed to prevent businesses from adding undisclosed fees at the end of transactions. The new law clarifies that if a restaurant adds a service fee to the bill, it must be clearly stated on the menu and cannot be a surprise when the bill arrives. While some argue that restaurants should be able to cover costs transparently, the law aims to provide transparency for consumers. The California Restaurant Association objected to the law's expansive interpretation, stating that service fees are permissible as long as they are properly disclosed on restaurant menus. The law also prohibits hidden fees in various industries, including ticket sales and hotels. Additionally, a separate law requires upfront disclosure of the total cost of hotel rooms, including all mandatory fees, to enable consumers to make accurate cost comparisons. This law poses a compliance challenge for hotel operators, but some have already made their properties compliant. However, despite the ban on hidden fees in various industries, restaurants are allowed to continue adding extra charges to customers' bills. This has sparked disappointment among consumers and advocates who had hoped for a ban on restaurant surcharges. Overall, the new laws in California aim to protect consumers against undisclosed costs and promote transparency in pricing across various industries, while also impacting Californians' pocketbooks.
