California’s restaurant scene is facing a new challenge this summer as a law targeting “junk fees” is set to shake up menu prices. With the recent increase in the state’s minimum wage to $20, fast-food chains have already adjusted their pricing. Now, with the new law taking effect on July 1, further price hikes are on the horizon.
The law, signed by Gov. Gavin Newsom, aims to eliminate surcharges and fees that restaurants often use to fund employee benefits like healthcare. While some establishments transparently display these charges on menus, others leave it to the customer’s discretion.
The ban on such fees is forcing restaurant owners to rethink their pricing strategies. With surcharges and fees becoming illegal, many establishments will have to increase menu prices to cover the costs previously offset by additional charges.
California’s attorney general has confirmed that the prohibition on restaurant surcharges and fees will be enforced, dealing a significant blow to the industry. Laurie Thomas, director of the Golden Gate Restaurant Association, expressed concerns over the law’s impact, stating that restaurants will be faced with a difficult choice: reduce wages for employees or risk alienating customers with higher prices.
As the summer deadline for the new law approaches, California’s restaurant owners are preparing for tough decisions ahead, with the potential for further disruptions to an already struggling industry. Industry experts predict that consumers will see higher prices, with some estimating increases of 5% to 15%.
Despite the challenges ahead, there is hope that the industry will adapt and overcome this hurdle. Food writer Marcia Gagliardo believes that while prices may rise, there is potential for positive change in the long run.