Senate approves ban on ‘junk fees’
Sen. Lindsey Port, DFL-Burnsville, discusses her legislation to ban "junk fees" — undisclosed charges tacked on to a bill at the end of a transaction — ahead of the Senate floor session on May 1, 2024. Photo by Madison McVan/Minnesota Reformer.
The Senate passed a bill Wednesday to curtail service charges and undisclosed fees tacked onto a customer’s bill at the end of a transaction.
The legislation would require companies to incorporate any service charges or other non-tax mandatory fees into the prices it advertises. Restaurants would still be allowed to charge a mandatory gratuity, as long as all of the money goes directly to employees and the tip is clearly included in advertisements that contain price information.
“Employee wellness fees” or other charges added to a customer’s bill to help an employer pay for health insurance and other worker benefits would not be allowed if the bill becomes law.
“Those are the costs of doing business,” said Sen. Lindsey Port, DFL-Burnsville, the bill’s lead author. “If you need to provide your employees benefits in order to continue to be able to hire in this climate…that’s the cost of labor.”
Bill advocates say it would promote price transparency, allowing consumers to make more informed choices.
Delivery platforms like DoorDash would have to disclose mandatory charges before a customer reaches the final checkout page. Businesses that determine prices based on time and travel requirements would have to disclose the factors associated with the total price, any mandatory fees and that the total cost of the services may vary.
Taxes, reasonable shipping fees and certain state-mandated charges associated with vehicle purchases would not be subject to the disclosure rules.
While a handful of Republicans voted with their Democratic colleagues to pass the bill, others opposed it, arguing that businesses itemize certain fees to call attention to, and protest, government mandates.
“Oftentimes, proprietors will include additional costs to highlight the fact that this is not a part of them providing a product. This is a part of the labor mandates, the state mandates, the local mandates that have been put on them to raise their costs,” said Sen. Eric Pratt, R-Prior Lake.
The bill now goes to a conference committee, where the Senate and House authors will hammer out minor differences in the legislation, Port said. After conference committee, it will go back to the House and Senate floors for a final vote before heading to the governor’s desk to be signed into law.
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