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California Gets More Bad News As Newsom Bans ‘Junk Fees’

This article was originally published at StateOfUnion.org. Publications approved for syndication have permission to republish this article, such as Microsoft News, Yahoo News, Newsbreak, UltimateNewswire and others. To learn more about syndication opportunities, visit About Us.
Minimum wage mandated

In California, menu prices are set to increase once more due to a new law coming into effect during the summer. This comes as a double blow for fast-food chains in the state, who had already raised prices to accommodate the $20 minimum wage mandated by the state last month.

Gavin Newsom

The new law, signed by Governor Gavin Newsom, prohibits “junk fees” in the state starting July 1, forcing restaurant owners to raise prices as it bans restaurant surcharges and fees.

Surcharges

Previously, restaurant owners used surcharges to provide benefits like health care to employees, sometimes making them optional for customers.

Raise menu prices

However, with the new law in place, restaurant owners are left with no choice but to raise menu prices to comply.

Illegal

The California attorney general confirmed that restaurant surcharges and fees would be illegal under the new law, posing a challenge for the industry.

Concerns

Director Laurie Thomas of the Golden Gate Restaurant Association expressed concerns that the law will put restaurants in a difficult position, potentially leading to lower wages for employees or deterring customers with higher prices.

Drops salaries

“So, now, do you take their rate down and do you go to an old-fashioned tip model and say to your servers, ‘You have to tip the whole house, but that drops everybody’s salaries’ or do you raise your prices 20%, 25%?” Thomas said. “It might make a lot of customers happier.”

Struggling

“They might say, ‘We understand why prices went up.’ Let’s hope that happens. But I don’t know if our industry can hope that’s what happens. They’re still struggling. It’s been a tough year.”

Doug Burgum

According to North Dakota Governor Doug Burgum, the increase in the minimum wage for fast-food workers in California is detrimental to businesses, labeling it as a ‘business killer’.

Impact

Governor Burgum highlights that the new minimum wage law in California will impact every food-serving business in the state.

Marcia Gagliardi

Additionally, food writer Marcia Gagliardi shared with CBS News Bay Area that the implementation of the new law will lead to an escalation in prices for consume

Higher prices

“I see restaurants easily raising prices 5%, 15%. It’s going to be tricky,” she told the outlet. “We’re going to be seeing even higher prices based on this unfortunate interpretation. But not all is lost. … Things could change.”

1 Comment

1 Comment

  1. Pointouttheponzi

    May 13, 2024 at 9:27 am

    Californians listen up! You have earned all that you have with hard work. This country belongs to all its honest workers. Some of you have been here for 3,4,5 generations. tell your heirs to kiss your estate bye bye

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