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California Restaurants Want an Exemption from State’s New Hidden Fees Law
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By Dan Walters, CalMatters Commentary
Published 2 weeks ago on
June 11, 2024

State Sen. Bill Dodd, D-Napa, proposes a new bill that would exempt restaurants from fully disclosing extra fees in their prices, a move that contradicts his previous legislation. (CalMatters/Adriana Heldiz)

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In “1984,” George Orwell’s novel about a dystopian future, he describes “newspeak,” a propagandistic language of euphemisms and inversions used by officialdom to mask the reality of their meaning.

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Dan Walters

CalMatters

Opinion

We got a dose of California-style newspeak last week when state Sen. Bill Dodd, a Napa Democrat, introduced Senate Bill 1524. It would exempt restaurants from his previous legislation, SB 478, which requires businesses to fully include extra fees in their prices, rather than tacking them on after services or goods have been delivered.

Dodd declared his proposed new legislation would “enhance consumer protection” for restaurant patrons by “clarifying state law” on how fees and other service charges should be disclosed.

“Restaurant customers shouldn’t be surprised when they get their checks by a slew of extra charges they were not expecting,” Dodd said. “Many restaurants are up-front with their business practices but too many aren’t, necessitating action.”

In fact, Dodd’s original legislation, passed last year and due to take effect on July 1, was aimed at eliminating “a slew of extra charges” on restaurant bills and other consumer transactions. But SB 1524 would reduce consumer protection by allowing restaurants to avoid full disclosure of their prices by burying the notices of extra fees within their menus, where customers are least likely to notice them.

Dodd’s ‘Deceptive Description’ of His Bill

The deceptive descriptions of Dodd’s new legislation accompany assertions by bill sponsors in the restaurant industry and their unions that if surcharges are included in food prices, they would somehow lead to pay reductions.

“Cutting the pay of banquet servers and ballpark workers was never the intention of SB 478, as the bill’s authors have made clear,” said Mario Yedidia, western political director for UNITE HERE, a union that represents some food service workers.

“This will enable restaurants to continue to support increased pay equity and to make contributions to worker health care and other employee benefits,” added Matthew Sutton, senior vice president of the California Restaurant Association.

There is absolutely nothing in the current law that prevents restaurants from raising their prices as much as they desire to increase their workers’ pay and benefits. That’s simply business as usual throughout the economy.

Why Should Meals Be Different Than Gas or Mortgages?

Nor is requiring restaurants and other businesses to list their full prices before consumers decide whether to make transactions such a novel idea.

Take, for instance, gasoline prices.

If you pay $5 for a gallon of gas, it includes about $1.50 in state and federal taxes and other surcharges. The full prices are displayed on signs and on the gas pumps themselves. Gas stations cannot advertise fuel for $3.50 and then tack on the extra fees and taxes after you’ve already filled your tank.

Before you buy a house and take on a mortgage, state law requires you to be informed of transaction fees before signing the final papers. Same applies for buying a new car.

When SB 478 was going through the Legislature last year, somehow those in the restaurant business assumed that it would not compel them to list full prices in their menus, even though there was nothing in the bill itself to support that assumption.

Uncertainty about SB 478’s effect on restaurants led Attorney General Rob Bonta to declare recently that they would be subject to the new law, generating a strong backlash from those in the industry and pressure on Dodd and other legislators to grant an exemption.

We shouldn’t be fooled by the newspeak descriptions of SB 1524. It does not “enhance consumer protection.” It would purposely undermine consumer protection by allowing restaurants to resume their bait-and-switch tactics – giving patrons menu prices that don’t fully reflect what their final bills will be.

About the Author

Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He began his professional career in 1960, at age 16, at the Humboldt Times. CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more columns by Dan Walters, go to calmatters.org/commentary.

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