Yes, Some Restaurants Currently Have 'Wellness' Service Charges — What to Expect from California's 'Junk Fee' Ban

Restaurants have added additional surcharges to cover rising operational costs, but California's "junk fee" bill will eliminate them starting in July

Have you ever noticed an oddly-labeled surcharge on your restaurant bill? In at least one state, often-unexpected fees will soon be a thing of the past.

In a video posted in early May, a TikToker visiting Los Angeles from New York shared her confusion over the additional charge she found on her restaurant bill. She explained that “every restaurant that we go to has a health and wellness surcharge.” She then showed her receipt for an un-named restaurant that charged an additional "Wellness Surcharge" of $2.55 on top of her existing bill.

Over the past few years, news articles have noted the phenomenon at eateries around the country — including in Pennsylvania, according to Philadelphia Magazine, and in Louisiana, according to PYMNTS.com. Back in 2022, the National Restaurant Association said 16% of restaurant owners surveyed said they have surcharges for diners at their establishments. Further, 75% of those surveyed restaurant owners that already had surcharges planned to keep that policy in place for more than a year.

L.A. restaurants in particular have relied on the additional service fees, like the wellness surcharge, to compensate for rising labor and supply costs. The fees have been a sore spot for many L.A. residents. Last year, Reddit users created a list of restaurants across the city that added on additional fees and surcharges in hopes of providing some transparency to other consumers.

That's soon changing: Starting July 1, the California Consumer Legal Remedies Act will go into effect. The law will ban California businesses, including restaurants, from displaying prices that don’t include the fees and charges that are included within the pricing.

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Common charges like automatic gratuity, which some restaurants commonly add on for larger dining parties, will be banned under the law. Instead, restaurants will have to incorporate any of these additional costs into their existing menu prices.  

Related: Georgia Restaurant Adds $50 Surcharge to 'Loud' Family’s Bill for 'Adults Unable to Parent'

The California Restaurant Association is pushing back against the bill and are planning to block the bill’s enforcement on restaurants. In a press release, Matthew Sutton, senior vice president of government affairs + public policy for the California Restaurant Association, said that “the FAQ released by the California Attorney General’s office today is a prime example of legislating through a press release. CRA strenuously disagrees with the AG’s expansive interpretation of the law to outlaw restaurant service fees."

On a larger scale, the Federal Trade Commission has also proposed a rule targeted these so-called "junk fees." The rule was proposed in October 2023, according to the FTC's website. A hearing regarding the rule was held in April.

The National Restaurant Association has similarly spoken out against the proposed FTC ban, claiming in a press release that it's implementation "will cost operators up to $3.5 billion" to put in place. Argued the association, "The FTC’s proposal doesn’t reflect the realities of the restaurant industry. It will be unworkable and unaffordable for most operators."

For now, if you're headed to California later this summer, you'll no longer see unexpected fees if you dine out.

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