California is banning hidden fees on restaurant bills. Here's what to know.
SACRAMENTO — Some California restaurants are bracing for big changes to how they charge customers as a new law takes effect this summer that bans hidden fees from people's bills.
The state is cracking down on fees tacked onto the bottom of restaurant bills.
"Hidden fees are bad for consumers and bad for competition," said Eleanor Blume, California's assistant attorney general.
They're sometimes called a competitive wage fee, or cost of living surcharge.
"Businesses use hidden fees or junk fees to pitch an artificially low headline price to attract a customer before revealing additional charges," Blume said.
A number of restaurants across the region have the extra charge. The cost is 23 percent at Allora in Sacramento, and Hawks Public House charges 3 percent on each bill and 20 percent for large groups.
Hawks owner Molly Hawks said the money helps boost the wages of the staff who work behind the scenes and don't get tips. This new law that takes effect in July prohibits restaurants from charging any extra fees other than tax.
State Senator Bill Dodd said it's part of a broader effort to eliminate confusing surcharges and also applies to things like concert tickets and hotel resort fees.
"The principle behind this bill is simple: the final purchase price for a good or service shouldn't be a mystery for California consumers," Sen. Dodd said.
The unexpected costs are also getting the attention of President Biden, who opposed them in his 2023 State of the Union speech.
"My administration has proposed rules to make cable, travel, utilities and online ticket sellers tell you the total price upfront so there's no surprises," President Biden said in his speech. "It matters."
The state attorney general's office said these fees cost consumers billions of dollars each year.
"In California, the price listed should be the price you pay," Blume said. "It's pretty simple."
The attorney general's office said restaurants can still raise prices on menu items if they want to provide higher employee salaries or pay for rising supply costs.