California Restaurants Face Deadline for SB-478: Hidden Fee Ban Takes Effect July 1st

California restaurateurs are facing a July 1st deadline to comply with Senate Bill 478 (SB-478), a new law that prohibits restaurants from adding hidden fees and surcharges to customer bills. Previously common service charges and facility fees must now be included in the advertised menu price.

The California Attorney General's office has released guidelines clarifying that all mandatory fees must be factored into menu pricing. This includes dine-in, takeout, and delivery options. While restaurants can still offer optional gratuity lines on receipts, all mandatory charges must be transparent from the outset.

The California Restaurant Association (CRA) has expressed concerns about the impact of SB-478. The organization fears menu price increases and potential job losses as restaurants adjust their pricing models. However, proponents of the law, including consumer advocacy groups, argue that it promotes transparency and protects diners from unexpected costs.

California restaurants have less than two months to adapt to the new regulations. This includes updating menus and signage to reflect all-inclusive pricing, potentially raising menu prices to account for previously separate fees, and training staff to answer customer questions about the changes.

While the full impact of SB-478 remains to be seen, California restaurateurs face a crucial deadline and a potential shift in how they present pricing to customers.

For restaurants outside California: While SB-478 only applies within state lines, it's a trend worth watching. Increased consumer demand for price transparency could put pressure on restaurants nationwide to follow suit. Consider offering all-inclusive pricing upfront to build trust and avoid frustrating surprises for your customers.