San Francisco, California – A new California law taking effect on July 1 aims to eliminate hidden service fees that have long been added to customer bills in restaurants. The law, prompted by concerns over mandatory service charges ranging from 4% to 20%, could lead to a shift in how costs are transparently presented to diners.

Food experts such as Marcia Gagliardi, who runs the long-standing food newsletter tablehopper, express mixed feelings about the impending change. Gagliardi points out that while the removal of added fees may seem beneficial for customers, it could result in increased menu prices as restaurants navigate how to cover additional costs like higher wages for their staff.

The legislation, co-sponsored by Bay Area senators Sen. Nancy Skinner and Sen. Bill Dodd, not only addresses hidden fees in ticket sales but also extends to service charges in restaurants. The goal is to establish a more equitable pay distribution among restaurant employees, aiming to balance earnings between servers and back-of-house staff.

As the restaurant industry braces for this shift, some, like Tom Medin, a veteran food tour leader in San Francisco, see potential benefits in refocusing attention on smaller, independent eateries. However, concerns persist about how establishments will adjust to maintain fair wages for their employees while keeping prices competitive and customers satisfied.

Laurie Thomas, Director of the Golden Gate Restaurant Association, raises valid concerns about the potential impact on operational costs and customer perception. The dilemma of whether to adjust tipping policies, raise prices significantly, or find alternative solutions looms large for many restaurants in the region.

While the removal of hidden service fees may offer a sense of relief to customers, the impending price adjustments could still impact wallets. Marcia Gagliardi predicts potential price hikes of 5% to 15%, reflecting the delicate balancing act restaurants face in adapting to the new regulations. Despite challenges, there remains hope for positive change and adaptation within the industry as it navigates this transition.