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Effective July 1, 2024, California’s Senate Bill 478 (SB 478), known as the “Honest Pricing Law,” aims to eliminate hidden fees and service charges in consumer transactions. This legislation mandates that businesses include all mandatory fees in the advertised price of goods and services, enhancing price transparency and protecting consumers from deceptive practices.
If you believe your compensation has been negatively impacted by the California SB 478, contact our Orange County wage and hour lawyer at Aegis Law Firm today.
SB 478 prohibits businesses from advertising, displaying, or offering a price that does not encompass all mandatory fees or charges, excluding government-imposed taxes and reasonable shipping costs. This practice, often referred to as “drip pricing,” involves initially presenting a lower price and revealing additional mandatory fees as the consumer progresses through the purchasing process.
The law applies to most goods and services intended for personal use, including event tickets, short-term rentals, hotels, and food delivery platforms. However, it does not extend to goods or services for commercial use or certain industries already governed by specific pricing laws.
A significant aspect of SB 478 is its effect on service charges, particularly in the hospitality industry. Historically, establishments like hotels and restaurants have added automatic service charges to bills, which customers were obliged to pay. Under the new law, such mandatory fees must be included in the advertised price, preventing businesses from adding unexpected charges at the end of a transaction.
One of the most significant impacts of SB 478 is that service charges that employees may experience a decrease in take-home pay if employers adjust service charges or gratuities to reflect the new rules.
Additionally, in industries where employees earn commissions based on sales prices, SB 478 may affect total compensation if employers adjust commission structures.
If changes in service charges or commission structures result in reduced pay, employees may have claims under:
If employees complain about pay changes or potential violations related to SB 478, employers cannot retaliate against them. Employees can file claims for:
If you believe that SB 478 has negatively impacted your compensation or employment conditions, our Orange County wage and hour attorneys at Aegis Law Firm can help:
Determine if changes in service charges, tips, or commissions violated wage laws.
Help you file complaints for unpaid wages, misappropriated tips, or retaliation.
Advocate for fair compensation or reinstatement if you faced retaliation.
Represent you in lawsuits to recover lost wages, penalties, and emotional distress damages.