Starting July 1, California restaurants will no longer be allowed to add a surcharge to their menus or services, which experts say will cause menu prices to skyrocket in San Francisco.
The ban, confirmed Wednesday by the California attorney general’s office, sent shock waves through the already suffering restaurant industry.
“Ending the ability for restaurants to use service charges (even if they are clearly and legibly stated on their menu) will have a very negative impact on the survival of this still struggling industry,” Golden said. Gate Restaurant Association to the San Francisco Chronicle.
“Diners will not pay less, but will instead see significant increases in menu prices, which we believe will cause them to forgo dining out more. … Not only will restaurants struggle, but workers will lose hours and jobs.
While consumers have expressed approval of the state’s decision to ban hidden fees and encourage price transparency, Bay Area restaurateurs fear the price increase will inconvenience customers who are already cutting back on their prices. dining out due to rising costs.
Diners at Zuni Cafe (pictured), best known for their Chicken for Two Dinner Specials, sparked controversy in 2021 when they stopped tipping and instead charged a 20% “fair wage” fee split among all employees.
If Zuni Cafe adds its 5% health mandate fee and its 20% fair wage fee into the cost of Chicken for Two (pictured), which is currently priced at $75, the price would increase to $94.50 .
The San Francisco Chronicle took a look at three of the city’s most popular dishes and how restaurants will adjust their prices in accordance with the ban.
Customers at Zuni Café, best known for their Chicken for Two Dinner Special, sparked controversy in 2021 when they stopped tipping and instead charged a 20% “fair wage” fee split among all employees.
On top of that, Zuni Café charges a 5% fee for the city’s health care mandate, requiring employees to put money aside for workers’ health benefits.
If both fees were included in the price of chicken, which is currently $75, the price would increase to $94.50.
Z&Y Restaurant, located in the heart of San Francisco’s Chinatown, is best known for its fish fillet in flaming chili oil.
The restaurant charges a 4% health mandate and an 18% service charge. Incorporating both fees into the price of the fish fillet, which was initially $38.95, the price would skyrocket to $47.79.
Koi Palace, a dim sum restaurant with three different locations in the city, is known for its rainbow sample of six Shanghai dumplings. They charge an 18% service fee and, if included in the total price, will increase the price of the dumplings from $12.80 to $15.10.
California Senate Bill 478 cracks down on hidden fees in various industries, including restaurants.
Z&Y Restaurant (photo), located in the heart of San Francisco’s Chinatown, is best known for its fish fillet in flaming chili oil.
Incorporating both the 4% health fee and the 18% service fee into the price of the fish fillet, which was originally $38.95, the price would skyrocket to $47.79 .
Koi Palace (pictured), a dim sum restaurant with three different locations in the city, is known for its rainbow sampling of six Shanghai dumplings.
If Koi Palace adds an 18% service fee to the total price, the price of dumplings will increase from $12.80 to $15.10.
Under this new law, restaurants must include any mandatory surcharges, such as service charges or fees related to local government mandates, directly in their advertised prices.
Disclosing these fees before or after the customer pays, as typically seen on menus, reservation platforms or receipts, will not be enough.
The law does not apply to taxes and does not affect tipping practices.
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