Washington D.C. — In response to SB 1524, a bill which carves out the restaurant and food service industry from the state-wide junk fee ban scheduled to go into effect on July 1, the American Economic Liberties Project released a letter explaining why the California Senate should reject the bill, and issued the following statement.

“The California State Senate must reject SB 1524, a hurried attempt to exempt the broader food service industry from California’s groundbreaking ban on junk fees that was passed last year,” said Pat Garofalo, Director of State and Local Policy at the American Economic Liberties Project. “California residents have made clear that they find food service junk fees deceptive and unfair. There are other avenues available to restaurant owners who want to improve conditions for their staff, and for legislators who want to support the food services industry, that do not involve once again legalizing deceptive pricing tactics that trick diners into paying more for their food.”

“Junk fees” are hidden charges that consumers only discover after they have committed to a purchase. These mandatory, hidden fees lead consumers to believe they will be paying one price for an item or service, only to find out right before they complete the transaction that the price is higher – sometimes significantly.

Since the pandemic, it has become even more common to see “service charges,” “living wage fees,” “employee healthcare fees,” and other charges added to a total bill, as restaurants struggled to both appear reasonably priced and remain profitable. However, as Economic Liberties’ letter details, these deceptive fees are highly unpopular with the public, make it extremely difficult, if not impossible, to compare costs between different establishments, and trick diners into believing they are paying a gratuity to staff when they are not. Junk fees are also anti-competitive, harming businesses that want to use transparent pricing practices and incentivizing the use of more, and higher, mandatory fees.

Read the full letter to the California State Senate here.

Learn more about the End Junk Fees campaign here.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.