Requires restaurant to disclose mandatory gratuity to patron and makes failure to disclose unlawful practice under consumer fraud act.
By mandating such disclosures, A5735 proposes to amend existing consumer protection laws in New Jersey, specifically supplementing the Consumer Fraud Act. This impact is significant, as it identifies the failure to inform customers about mandatory gratuities as an unlawful practice, thus subjecting violators to financial penalties. The penalties for non-compliance can be steep, with a maximum of $10,000 for a first offense and $20,000 for subsequent violations. Additionally, the bill empowers the Attorney General to issue cease and desist orders and allows the recovery of punitive damages and treble damages for affected patrons, which could facilitate more vigilant enforcement of consumer protection in the restaurant sector.
Assembly Bill 5735, introduced in New Jersey, aims to enhance transparency within the restaurant industry concerning mandatory gratuities. The bill explicitly requires restaurants to disclose any mandatory gratuity charges to patrons in a prominent manner, which can include the menu, the entrance of the restaurant, on patrons' bills, and on the restaurant's website. This requirement seeks to ensure that patrons are well-informed about additional costs they may incur while dining, thereby enhancing consumer rights and promoting fairness in dining practices.
While the bill's intent is to protect consumers, it may also generate friction within the restaurant industry. Restaurant owners may argue that mandating additional disclosures could undermine their operational flexibility and could create an additional administrative burden. There may also be concerns regarding how such disclosures could affect customer satisfaction and dining experiences, particularly if gratuities are expected components of service quality. These discussions may serve as a critical point of contention during legislative discussions surrounding the bill, reflecting differing priorities between consumer advocacy and business autonomy.