Effective July 1, 2024, California’s Junk Fee Ban (SB 478) will go into effect, making it unlawful to advertise, display or offer a price for a good or service that does not include all mandatory fees or charges.

The law is intended to address the bait-and-switch practice of using hidden, surprise, and drip fees to keep prices low on a website or menu, and then add a “Resort Fee” or “Service Charge” or “Surcharge” at the end of the purchase. This practice leads to a larger cost for the hotel stay, event ticket, or meal than many customers intend.

This new law may not make things cheaper, as a business can set prices as they wish, so long as the final total is disclosed upfront.

The impact on restaurants is expected to be significant. Many restaurants that use a “surcharge” to offset costs of increased minimum wages throughout the state will have to change their practices.

We expect class and PAGA actions alleging unfair business practice and false advertising claims to abound for hospitality businesses that do not have their websites, menus, and other pricing publications updated by July 1, 2024. If you are one of them, contact your business attorney to help get you in compliance

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.