New California Law about Junk Fees and its Impact on Restaurant Prices

It will be interesting to see how the restaurant prices will move up and its general impact on the restaurant industry but at the same time there are now so many mandatory fees put on bills that something had to happen

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Logically, meals should cost the same if the fees are rolled in, if they’re paying the employees. As I recall when the healthcare fees in SF were added, it was the GG Restaurant Association’s idea to put the fee on the check. At that time people asked, why? I never understood why except to say, it’s not us.

A few of things:

Restaurants saying prices might go en masse seems to be what restaurants intend to do. If they pay for staff healthcare, etc., who can blame them. Cynical side suggests they might pocket the increases…and not pass along the fees to staff. Given how some restaurant operate, that does happen.

Some services fees seem completely warranted and fair…like service fees for large parties., especially if servers can get stiffed on a tip. That should only affect large parties, not smaller parties. I think that should be an exception because there is more labor and staff required.

The article suggests the state will NOT go after restaurant fees that go to staff…initially. Seems like they figure there will be an adjustment period.

One question, will restaurants like Chez Panisse still be able to charge an all-inclusive price for a meal? I personally like this model, if staff is being paid. I understand at CP, waitstaff can make a real living.

Given all the tipping etiquette changes…what is the fair amount to tip, minimum? 20%., 25%. will that go down after the overall price increases?

Presumably, the restaurants that do this, like Chez Panisse and French Laundry, can still use the all-inclusive model so long as they fold the cost of their current fees into menu prices. I think the biggest sense of sticker shock in that case might be with the wine list.

Thanks for including the Eater link. According to the FAQ, no on autogratuities because it’s not included in the price, yes to Chez Panisse if service is included in the price.

methinks folks dining at places like The French Laundry and other “uberhighend” places are not especially sensitive to these issues.
like some dude once said: “If you have to ask the price, you can’t afford it.”

unless restos incorporate not only the previously applied fees, but use it to hide additional increases . . . the price of the meal should be the same. what is the difference in the total if it’s “menu price+fees” or “menu&fees price”?

Because people are stupid.

People order something from a menu based on the price of the dish (i.e. $10 hamburger).

People do not take into account a service charge, health care fee, mandatory gratuity charge, or welfare surcharge or whatever, when deciding what to order while perusing a menu.

People will not order the same hamburger priced to include all those “junk fees” if the menu listed it at $12 (instead of $10).

It’s the same reason that mandatory sales tax are not included in the typical “menu price”.

A better question might be, if restaurants are mandated to include all “junk fees” should the law also require those same restaurants to include the mandatory sales tax (local, county, state, fed, etc.) in menu prices as well?

my misunderstanding. I thought the discussion was about ‘the price’ and not ‘how stupid some people are’

anyone who lives in CA and does not know there’s a pile of fees that get tacked on . . .
and anyone from outside CA - where idiot fees are not imposed - will very rapidly learn that at their first resto bill . . .

perhaps CA should require signs on the entrance: “Do not enter if your IQ is less than 100”?

It would be nice if U.S. restaurant and store prices were all inclusive. taxes, fees, etc., like in Europe. “What you see is what you pay“ seems better for everyone, consumer, merchant or restaurant. It eliminates sticker shock, confusion and arguments. Restaurants adopting this would be user-friendly. Even at fast food joints or mom and pop places, this would be good.


regrets to point out, multiple restos have adopted the ‘all included’ approach, and every one of them has since reversed and gone back to ‘the old way’

pick a reason, doesn’t matter, facts are facts.

this is true for some, perhaps the majority? (i don’t have the numbers), but it’s not the case for some. i regularly frequent places that are using an all-inclusive no tip policy (i seek them out). perhaps they will revert back to the old, imo flawed model. but, it’s been years, and as of now, it’s full steam ahead. it can be done. a properly educated consumer is a real hurdle to further adoption. i’ll fully grant that.

The reason is the stupidity of people (as discussed above) to only react on the “immediate” price on the menu vs being able to calculate that the “final” price will be the same. The problem is if only a few restaurants change to an all inclusive approach they are in a significant disadvantage compared to all other restaurants. If all restaurants in a large city would agree to change all together to an all inclusive approach at the same time, I am quite sure it would be successful


as Ron White so famously said . . . “You can’t fix stupid.”

resto who have switched to ‘all included’ plaster that all over everything.
so people are not only stupid, they can’t read!

and a number of the restos that did try the ‘all included’ routine reversed the policy because they could not keep good waitstaff. all included, no tipping, living wage, etc etc etc - and waitstaff quit and went places where they earned more money in tips.l

Nut it is a reality the restaurants (and we all) have to face

Yup, blame the consumer for being stupid. That’s American tradition, as is tipping. Few countries have tipping cultures to pay waitstaff basic wages like the US. Do a search on tipping, NY Times and slavery in the US. Won’t get into that, but it’s there and the culture is still in the US.

I’d argue that given the GG Restaurant Assc. wanted the healthcare fee on checks, they’re a lot to blame. Again, why did GGRA want that on checks? I don’t get it. From a hospitality and patron perspective it’s dumb. It causes confusion, makes waitstaff defend it and it’s just not good hospitality. Make it easy on a patron but also be fair.

Taking the opposite tack, simplifying prices would likely help business. How? If tipping the bartender was no longer a thing, I’d argue people would buy more drinks and be more likely to return. $10 bucks a drink, I have $40 bucks…simple stuff. Adding the tip mucks things on both sides…staff pours weak drinks, patron leaves zero tip. No one wins.

Similarly, all inclusive prices (tax, fees, etc.), fast food to fine dining, is straightforward. $10 buck sandwich, I have $20, it takes one element out of the equation.

If you’re at a high end restaurant and there’s iffy service and a tip, it requires the patron to think…after a nice meal and a drink…it might make they question coming back, or leave a sour taste…and perhaps no tip. Eliminate that and the iffy service is still iffy but you don’t have to thinking, you just pay the price and leave. I’d argue a better chance of returning.

That’s all I got. This is a cultural thing…and culture is very difficult to change.


you do realize that insufficient tips means the employer must put in enough additional pay to ensure the waitstaff make local/state/Federal minimum wage, right?

the often SCREAMING IDIOTS who think waitstaff are paid only $2.37/ hour are plain more stupidier than people who can’t adjust for menu price + fees…

… a better chance of returning for poor service…? not following that. tip or no tip, poor service and/or marginal food rates a “nevermore” in my world.

I always assumed they wanted it there in order to make clear it was being imposed on businesses (and therefore imposed on you, the consumer), so having “4% mandatory healthcare fee” on the check was a way of saying, “hey, it’s not our fault you’re paying more for your meal” vs. just incorporating it and having higher menu prices.


Yes, all or most restaurants would need to band together and decide to do all inclusive. That’s the only way to effectively compare final prices.And to gain acceptance for the all inclusive menu price. Let’s keep it simple : everybody does it or at least most.

Even people adept at percentages find it tedious to scroll through online menus, look for all places on the website to find any added fees (could be 2 or more added fees), figure out a tip if tip is not included, come up with final price of a dish to compare with all-inclusive menus.

Doing even a math problem that’s simple except for the multiple steps and percentages is not something most people want to do before choosing a restaurant.

People who can afford it and are used to final prices at fine dining will be prepared and won’t bother with trying to compare prices. Most people don’t have that kind of disposable income and even some who do will complain about add on charges.


First, this law doesn’t change tips. You can still tip.

second, It does outlaw a service change in liu of tip, and all the 2 to 4 percent silly surcharges.

Third, it is not a fact that every single restaurant that is no tip, no service charge has switched back. I ate in one a few weeks ago, although i can’t remember which. Lets not get hyperbolic about claiming facts that aren’t. It is true to my knowledge and experience that there are very few. There are plenty which are service charge in liu of tip, those will have to make a change. I hope they will change to no tip and the fact that many are doing it at once will create momentum.

Fourth, any frequent california diner who thinks there is a substandard ‘tipped wage’ here has been living under a rock. Servers have the same minimum wage as bussers. No californian is tipping to prevent servers from starving. i might apply the word ‘stupid’ to a californian who doesn’t know this, but i will tend to use ‘uninformed’.


That’ makes sense, passing the buck of responsibility. It lines up with American tipping culture and the tradition of restaurant workers being low paid and having to “earn” a wage based on how the patron feels.

Apologies for tossing in the tipping stuff in the surcharge discussion but it’ s coming from the same place — traditional restaurant culture is low pay based on tipping…so it’s NOT the owners responsibility and neither is healthcare….SO GET OFF MY LAWN!!!

Of course consumers are fed up with tipping culture, and passing the responsibility of employees compensation on the patron. I understand waitstaff “demanding” a better tip, because their living depends on it…but it’s very bad customers service and hospitality and it makes people mad. That’s why I ‘m for the “what you see it what you pay” (tax, service fees, whatever). The all-inclusive price makes it easier for patron, staff…and owners if they can figure it out.

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I am just going to pop my head up in the tip (not surcharges) discussion to say servers livelihood does not depend on tips in california. Servers have the same minimum wage protections in as any other worker, and the same ability to bargain with management.