The new bill, which passed unanimously through the state Assembly and Senate in late June, was co-authored by Sen. Bill Dodd — who also co-authored SB 478 — as well as Sen. Scott Wiener and Assemblymembers Matt Haney, Jesse Gabriel and Cecilia Aguiar-Curry, all Democrats.

It is supported by the California Restaurant Association and labor union Unite Here, both of which represent thousands of hospitality workers in California.

"This (SB 1524) will enable restaurants to continue to support increased pay equity and to make contributions to worker health care and other employee benefits," Matthew Sutton of the California Restaurant Association said in a public statement. "And, importantly, consumers will remain empowered to make informed choices about where they choose to dine out."

While some restaurateurs and bar operators are breathing a sigh of relief over the continuation of service fees, others are frustrated with the government's quick change in tack.

Per the attorney general's guidance for SB 478, in April restaurateur Dustin Lancaster rolled a 4% surcharge into the menu list prices of two of his L.A. restaurants, L&E Oyster Bar and El Condor. He said that in light of SB 1524 he will not revert to a service-fee model, at least for the foreseeable future, and that it is "not so simple to just un-bake the cake."

"This is, sadly, all too familiar territory for restaurants in California," Lancaster told the L.A. Times this week. "Just like in COVID they jerk us around and expect us to pivot and change our model repeatedly as if it's no big deal to small businesses. Restaurants continue to shutter (at) an alarming rate in L.A. and this sort of unnecessary about-face is why California continues to be the least small-business-friendly state in America."

At Bell's, a Michelin-starred restaurant in Los Alamos, ownership diligently tracked the progress of both senate bills and awaited final word before determining whether to remove their 20% service charge, which benefits all non-managerial staff. Before SB 1524's passage, the Bell's charge was already listed on the lunch and dinner menus, the website on the page for frequently asked questions, and on the homepage as it pertains to takeout orders; the new law will allow the restaurant to continue its practice without reconfiguring its business model.

Greg Ryan, an owner of Bell's, told The Times that he is listening to and understanding of customers, legislators and his team, and that he wants to do what is best for his staff.

For months, the practice has felt like a balancing act.

As SB 1524 made its way through California's Assembly and Senate, outcry on social media and in public forums such as Reddit has been swift and vocal, with multiple anonymous posters commenting that they will begin leaving 0% tips in retaliation to the exemption. Another Reddit user created a spreadsheet that tracks surcharges and service fees in restaurants across the state.

An L.A. restaurateur who requested to remain anonymous for fear of customer retribution told The Times that they noticed an increase in $1, 0% or other low tips over the course of the month, possibly because of the 3-4% service fees charged at the restaurant.

"I'm not thrilled with the bill," said Jenn Engstrom of CALPIRG. "I think it was better when restaurants and bars also had to have really clear upfront pricing, so that consumers could do easy comparison shopping. When I decide to go out to a restaurant with my family, I check the prices first, on the menu, online."

That SB 1524 requires clear posting is a benefit, she said, but is not as strong a bill as SB 478 with its initial guidance from the attorney general that called for rolling service fees into list prices. Engstrom called SB 478 "a great model bill" and would love to see similar consumer-protection legislation in other states, or federally — without many carve-outs for industries, regardless of how service fees factor into their business plans.

"I think this (SB 1524) is unfortunately kind of a step backwards, but it's still transparent," she said. "You can still see it, you just have to do the math."

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