What is the new ‘junk fees’ law that takes effect in California on July 1?
As of July 1, Senate Bill 478 comes into effect in California. With this, ‘junk fees’ imposed by various establishments will be prohibited in the state.
As of Monday, July 1, Senate Bill 478 takes effect in California. Through this new legislation, the government of the Golden State seeks to protect customers and consumers by prohibiting the infamous “junk fees” imposed by establishments on purchases made in the state.
California residents have tended to pay more for products and services, because the price displayed initially is not the amount paid in the end. This is due to additional hidden fees being tacked on that are not displayed properly.
“This bill, effective July 1, 2024, with specific exceptions, would also make it illegal to advertise, display, or offer a price for a good or service that does not include all mandatory fees or charges other than taxes or duties imposed by a government on the transaction,” the bill reads.
“This law aims to regulate how prices are advertised, displayed or offered.”
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The new ‘junk fees’ law that takes effect in California
With the new law, companies and establishments are obliged to be 100% transparent with their customers, which means that they must adequately display all extra charges in advance. The measure applies to both physical and online purchases, including tickets for concerts, as well as hotel and flight reservations. Government taxes and fees are separate and are not included in the new legislation.
“Californians will know in advance how much they are asked to pay, and will no longer be blindsided by hidden junk fees,” explained state Sen. Nancy Skinner, D-Berkeley, months before the new law took effect.
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Exceptions to the new law: Restaurants, concessionaires...
However, just days before Senate Bill 478 was scheduled to take effect, Governor Gavin Newsom signed an emergency measure to exempt California food and beverage vendors.
The exception to the rule comes after the California Restaurant Association opposed its implementation, arguing that it would significantly affect the operations of restaurants throughout the state, since many of the hidden fees include tips.
Senate Bill 1524, the emergency measure signed by Newsom, will allow restaurants and bars to continue charging service fees, healthcare costs and other surcharges, as long as they are disclosed clearly and conspicuously for customers to see.