Trenton, NJ – A bill that would require restaurants across New Jersey to clearly disclose mandatory gratuity charges advanced to second reading in the Assembly this week, signaling growing scrutiny over automatic service fees added to diners’ bills.
The legislation, sponsored by Assemblymembers Dan Hutchison, Michael Venezia, and William B. Sampson IV, was reported out of the Assembly Consumer Affairs Committee on February 12 with amendments. The committee vote was 6-0, with one member not voting.
The proposal would prohibit a restaurant from charging a mandatory gratuity unless the fee is disclosed prominently in four places: on the menu, at the entrance of the restaurant, on the patron’s bill, and on the restaurant’s website if one exists.
Under the bill, a violation would trigger escalating civil penalties. A first offense would carry a $1,000 fine, a second offense $2,500, and a third or subsequent offense $5,000. Each day a violation occurs would constitute a separate offense, though businesses would not face more than one violation per day.
- Bill requires disclosure of mandatory gratuity in four locations
- Penalties range from $1,000 to $5,000 per offense
- Measure advanced from committee with unanimous support
Consumer transparency at center of debate
The measure supplements the state’s Consumer Fraud Act, though it does not apply that law’s separate penalty structure. Instead, enforcement would proceed under the Penalty Enforcement Law of 1999 through civil action in Superior Court.
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Lawmakers backing the proposal say the goal is to ensure customers are aware of automatic service charges before they order or receive a bill. The bill would amend Title 56 of state statutes and, if enacted, would take effect on the first day of the third month following signing into law.
The legislation previously appeared in the last session as A5735 and S4459. It has been certified by the Office of Legislative Services for a fiscal note.
Debate around restaurant service fees has intensified nationwide as more establishments adopt automatic gratuities or service charges. Additional updates on related New Jersey restaurant regulations and broader developments in NJ consumer laws are expected as the bill moves through the legislative process.
Lawmakers target surprise service fees in dining rooms statewide
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