California restaurant owners are taking a stand against a new law that would prevent them from charging service fees to customers. The law would force servers to rely on tips, which are notoriously biased based on the diners’ personal prejudices.
Senate Bill 478, or the junk fee ban as it is being called, was drafted to crack down on surcharges often associated with hotel, car rental, and ticket sale companies. These fees have been a target of the Biden-Harris administration and California Attorney General Rob Bonta, who co-sponsored the bill with Northern California legislators Senator Nancy Skinner, a Democrat representing Oakland, and Senator Bill Dodd, a Democrat representing Napa. The California Attorney General’s Office released a frequently-asked-questions document about the bill last week, which confirmed that along with hotel, car rental, and ticket sale fees, the bill would ban restaurants and bars from charging mandatory service fees.
Service fees charged by restaurants and bars are designed to supplement or replace voluntary gratuities that are often skewed based on patrons’ biases. The American tipping system has long been plagued by racism, sexism, and harassment. In some cities, like San Francisco, those fees often go towards the city-mandated fund for employee health care. Surcharges ranging from 5% to 7% usually health care costs, but without them, restaurants will be forced to raise prices. While some might argue that the world has become progressive enough that tipping is no longer biased, according to data collected by Eater, the culture of bias among tippers remains alive and well. The site’s data surmised that tipping culture is “racist, sexist, and degrading.”
Without intervention, the bill will go into effect on July 1. However, the California Restaurant Association does not plan to let that happen. According to the San Francisco Chronicle, the organization is arguing that the legislation does not apply to restaurants or bars because of language in the bill that specifically points to goods and services. The California Restaurant Association would argue that restaurant menu items are neither and therefore should not fall under the bill.
Furthermore, it appears that lawmakers never discussed whether restaurants would fall into this category when drafting the bill. According to the Chronicle, documents show that it was only after Governor Gavin Newsom signed the bill that restaurants were brought into the conversation at all. Confusion over whether restaurants would be included in the junk fee ban began in October last year and was only put to rest last week when the Attorney General’s Office released its FAQ sheet.
The California Restaurant Association could very well go to court over the law. The confusion over whether or not restaurants should be included in the bill and the technicality over the language of “goods and services” presents enough legal liability that the lobby could have a case. According to the Chronicle, a lawyer representing the California Restaurant Association has already sent a letter to Attorney General Bonta demanding that he remove restaurants from the list of impacted businesses. The organization has gone to court recently and successfully got a 2019 law thrown out that would have banned gas stoves in newly constructed commercial buildings.
