California's Junk Fee Ban Modified to Address Restaurant Fees

Earlier this year, two trends gaining momentum neared a collision in California’s restaurants and bars. One was a statewide ban on junk fees — here defined as anything over and above the items purchased on a particular visit to a shop, hotel or other establishment. The other? The fact that a growing number of restaurants are charging fees in order to pay their staff a living wage or provide them with healthcare. The metaphorical collision in this situation is that California’s government seemed ready to treat restaurant fees as junk fees — which is to say, not allowing bars and restaurants to charge them.

Now, the Golden State has announced how it plans to resolve the conflict — and it’s in a way that should keep restaurant employees happy. Eater’s Dianne de Guzman reports that a new piece of legislation, Senate Bill 1524, carves out an exemption for restaurant fees. The state’s governor, Gavin Newsom, signed the bill into law late last week.

Dining establishments must state their fees in a way that is done “clearly and conspicuously” in order to be covered under SB 1524. Specifically, the bill states that the junk fee ban “does not apply to a mandatory fee or charge for individual food or beverage items sold directly to a customer by a restaurant, bar, food concession, grocery store, or grocery delivery service, or by means of a menu or contract for banquet or catering services that fully discloses the terms of service, subject to certain exclusions and conditions.”

There does seem to be some wiggle room in there that could lead to confusion down the line — but for bartenders and other food service workers concerned about a hit to their income, this clarification to the earlier law should be useful.

California Restaurants Are Upset With the State’s Junk Fee Ban

Specifically, they’re frustrated with mixed messages about it

That said, de Guzman’s reporting also points out that the very existence of restaurant fees remains a contentious subject for diners throughout the state. That’s not limited to California’s bars and restaurants; plenty of establishments in New York and elsewhere have navigated the question of whether it’s preferable to request tips from diners or add a surcharge instead. California’s recent decision should answer some questions, at least temporarily, but it’s unlikely to end the larger conversation.