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Restaurants can charge service fees and tips after Governor Newsom signed a last-minute exemption to eliminate the fee bill

Governor Newsom signed a last-minute waiver allowing restaurants and other establishments that sell prepared foods to continue charging service and tip fees. The move was made to clear up confusion about whether a new law banning junk fees in California would apply to those businesses.

The original law, SB478takes effect on July 1. It would have made it illegal for companies to “advertise or display a price for a good or service that does not include all required fees or charges other than certain state taxes and shipping costs,” according to an interpretation of the law by California Attorney General Rob Bonta Approved in May.

In that statement, Bonta indicated that these requirements would also apply to restaurants. That clarification prompted lawmakers to rethink the basics and craft an exemption for restaurants.

The new billSB 1524, was fast-tracked through the State Assembly before the start of next month before being signed by Newsom on Saturday. It passed unanimously in the State Assembly and Senate and was supported by restaurant associations across the state. It also grants service fee exemptions to other establishments that sell prepared foods, such as bars, catering companies and supermarkets.

Senator Bill Dodd, co-sponsor of both bills, said the bill still contains safeguards designed to ensure that “restaurant customers don’t get a shock when they get their bill.”

The bill would require restaurants to clearly state what additional fees, including service charges and tips, they will charge.

“SB 1524 strikes the right balance between increasing transparency for consumers and providing clarity and flexibility for restaurants in covering their costs,” said Lieutenant Governor Eleni Kounalakis, a co-sponsor of the bill.

For other retailers, such as ticket sellers and hotel booking sites, SB 478 still applies. That means you can say goodbye to those pesky Ticketmaster fees starting July 1: They’ll have to disclose the full price of their goods up front—but that doesn’t mean ticket prices will get cheaper.

What questions do you have about Southern California?

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