Restaurants exempt from new California law banning hidden fees

SACRAMENTO — A new California law in effect is designed to protect consumers against excessive or undisclosed costs on purchases. However, Gov. Gavin Newsom signed a last-minute exemption for the restaurant industry.

Some have called it a junk fee law. Legislators passed it to prevent businesses, like restaurants, from advertising a price for an item and then tacking on hidden fees when it's time for a customer to pay. This does not include taxes or shipping costs.

"I bought tickets for a standup comedy show downtown," civilian Ruslan Mazurchak said. "The ticket was $20 It was on StubHub for $20 and there was $30 in extra fees. It was ridiculous."

It's a practice common in ticket sales and other industries like hotels.

Dean Huitrado, owner of Railroad Fish and Chips in Old Sacramento, admits he has a 50-cent charge on his to-go bills.

"It's the costs we've seen across the board from napkins, oil, ketchup, togo containers—a good example where, in some cases, the price has doubled," he said.

California lawmakers said enough was enough, enacting a price transparency law banning hidden charges ensuring that fees are refundable and penalizing violators. California's attorney general went one step further including restaurants.

The California Restaurant Association objected to the expansive interpretation of the law that would disrupt restaurant operations statewide.

Matthew Sutton, the senior vice president of government affairs and public policy with the restaurant association, said:

"Courts have consistently concluded that service fees are permissible under the consumer legal remedies act as long as they are properly disclosed on restaurant menus."

That's why the association supported Senate Bill 1524, a last-minute clarification pushed through this weekend to help restaurants keep service fees.

"I see both sides to it, but the less they get involved with it the better," Huitrado said.