Following up on our article from last Thursday, there has been a major update for restaurants in the wake of California Senate Bill 478. The Bill, which went into effect on Monday, was set to outlaw surcharges or “hidden junk fees” from businesses, including food and beverage vendors in the state of California. However, last-minute Senate Bill 1524 signed by Governor Newsom on Saturday has officially exempted restaurants and bars from this requirement, effective immediately.

This bill was created by members of the Senate and State Assembly after outcry from business operators, the California Restaurant Association and labor unions against SB 478. After a quick run through the Senate, Governor Newsom has officially allowed restaurants and bars to continue charging service fees and other surcharges when listed clearly for diners to see. From the bill, “These conditions would include that a mandatory fee or charge be clearly and conspicuously displayed with an explanation of its purpose on an advertisement, menu, or other display and, as of July 1, 2025, meet certain text requirements, as prescribed.”

This quick change comes as a relief to California restaurant owners, who will now be able to keep mandatory fees on their menus and refrain from rolling these prices into their menu items. For now, restaurant and bar owners (and their accountants!) can breathe a sigh of relief.

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