New California law will ban restaurant surcharges, hidden fees

LOS ANGELES -- Californians will soon see a change on their bill the next time they decide to pick up the tab at a restaurant.

A new law aimed at banning "junk fees" is set to go into effect in July and will make restaurant surcharges illegal.

Under SB-478, restaurants will no longer be able to charge service fees and will instead have to fold those charges into its menu prices.

The new law was authored by Sen. Nancy Skinner and Sen. Bill Dodd and was sponsored by State Attorney General Rob Bonta when it was first introduced. The law prohibits businesses from charging those "junk fees" or burying added costs to artificially lower prices.

"These deceptive fees prevent us from knowing how much we will be charged at the outset," said Bonta in a statement released in Oct. 2023. "They are bad for consumers and bad for competition. They cost Americans tens of billions of dollars each year. They hit families who are just trying to make ends meet the hardest. And, because a growing list of websites, apps, and brick-and-mortar businesses are using them, they penalize companies that are upfront and transparent with their prices. With the signing of SB 478, California now has the most effective piece of legislation in the nation to tackle this problem. The price Californians see will be the price they pay."

The full text of the legislation can be found here.