After months of stress due to ambiguities in California’s “Hidden Fees Statute,” colloquially known as the “Junk Fee Ban,” it seems the collective outcry from the hospitality industry has finally been heard. Yesterday, Senator Bill Dodd introduced an emergency amendment to the law that would allow for mandatory charges on food and beverage items sold by a restaurant, bar, or pursuant to a banquet or catering contract. The proposed amendment would add the following language to the Hidden Fees Statute:
(29)(D). For purposes of this paragraph, advertising, displaying, or offering a price for a good or service does not include advertising or displaying the price of individual food or beverage items sold by a restaurant, bar, or other food service provider, or sold pursuant to a contract for banquet or catering services, provided that any service charge, mandatory gratuity, or other mandatory fee or charge is clearly and conspicuously displayed on the advertisement, menu, or other display.
If passed, this amendment would mark a significant course reversal from the prior interpretation of the law by the Attorney General’s Office, discussed in our previous article. The amendment would undercut the law’s application to restaurants and hotel food and beverage departments, who continue or reinstate any prior practices related to service charges or other mandatory fees, as long as those practices complied with the new disclosure requirements. However, resort fees and other related fees on the rooms side of hotel operations would remain prohibited.
The emergency bill, which has received support from industry representatives and UNITE HERE alike, could pass by July 1, 2024, the effective date of the Junk Fee Ban. Considering its immense support, we anticipate that the amendment will be passed. We will continue to keep you updated regarding this proposed amendment.
