Following weeks of speculation, California Attorney General Rob Bonta has taken a bold step. As of right now, no restaurant in the state is allowed to charge more than what is stated on its menus or menu boards. This prohibits service fees and other surcharges. The new law will go into effect on July 1.
The ban’s supporters are claiming that it was long overdue. Adding that there was a need to stop the practice of charging for services without the customer’s approval. California restaurants use service fees to cover labor costs without lowering menu prices.
People have complained as these costs frequently surprise guests, resulting in confusion and annoyance. The restriction ensures that restaurants include the service cost in their menu prices or make any additional expenses known upfront.
We think this will help customers understand the cost and options better, guaranteeing that they make the best choice whenever they decide to eat out.
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Furthermore, this ensures equity and justice in the hospitality sector. Service fees were once considered an extra burden, especially for lower-income individuals struggling with dining costs.
The goal of the prohibition is to increase accessibility for all Californians, regardless of their financial situation, by doing away with these unnecessary payments.
Still, not all of us believe that the ban on service fees would be helpful. Some restaurant owners and business associations are against the introduction of this ban, claiming their businesses may suffer financially. This comes in the aftermath of the COVID-19 outbreak, with businesses recovering from its impact.
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Critics warn it may harm us, both as consumers and businesses, by reducing dining affordability and accessibility. Service fees were an essential source of income for many restaurants, helping to maintain staff wages and pay running costs. Without these fees, some businesses would have to increase menu pricing or cut employees to stay in business.
Critics have debated that the ban breaches restaurant owners’ rights to choose their prices per the demands of their businesses, with government interference. The government risks altering restaurant growth and competition by limiting service fees.
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Supporters of the ban are unwavering in their conviction that it is an essential step in advancing consumer rights and transparency despite these reservations. Using other state laws as examples, they believe California’s ban will benefit everyone in the long run.
California is improving restaurant labor laws to protect workers. So, when you go out to eat in California, make sure you check the menu and service before making a decision.
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