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Looming California law on "junk fees" may face changes after pushback from restaurants

New California junk-fee legislation will impact restaurateurs
New California junk-fee legislation will impact restaurateurs 03:32

SAN FRANCISCO – A new California law aimed at ending so-called "junk fees" on purchases could face changes after facing pushback from the state's bars and restaurants.

Marco Senghor has owned his African restaurant in the Mission since 1997. He is among the many restaurant owners concerned about a new law set to take effect on July 1 that would prevent them from charging "service fees."

"It's all about being clear…clarity…We have been charged with so much, left and right…by the tablets, by the taxes, by the credit fees, so many fees and also trying to do better salaries for our employees and health protection for the employees so we need to cover all these costs at some point," Senghor explained.

Senghor is paying close attention to the latest development in this legal back-and-forth. State Sen. Bill Dodd (D-Napa) has introduced a new piece of legislation that would protect restaurant fees as long as they are presented clearly to the customer.

"Nobody is here in the business trying to cheat anyone, and everybody should know exactly what they are paying for, and I support it. I'd love to be very clear because every customer would feel good, and we would feel good," Senghor added.

This means restaurants would continue to operate as they currently do, by disclosing any extra fees on menus, websites, or reservation notices. This effort aims to clarify Senate Bill 478, known as the "junk fee ban," which bans undisclosed fees from rental car dealers and ticket sellers for concerts and other events.

The inclusion of restaurants in this bill has caused confusion.

In a statement, the California Restaurant Association said they are supporting this new bill, stating, "The bill addresses questions that have been raised since the passage of SB 478, and will ensure it is implemented in a manner that does not unnecessarily disrupt restaurant operations throughout the state."

Dodd, who co-authored SB 478, emphasized that the new legislation is meant to ensure transparency and fairness in the industry. For example, if a restaurant adds a 20% gratuity for large groups, that 20% must be clearly stated upfront on the menu. It cannot be a surprise that only shows up when the bill arrives.

"I would add, for example, tips in there, the distribution, or delivery, but in this case, there's no delivery, or some companies are contacting us now saying why are you paying the credit card fees, why don't you have the customer…he is the one who chooses to use his card," Senghor said.

Lawmakers are rushing to pass the emergency restaurant legislation before July 1.

"We're working so much, and our customers who have been supporting us for so many years totally understand us, and some of them even offer to give more to us to help because they understand why we're doing this job," Senghor concluded.

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