Restaurants in New Jersey would be required to clearly disclose any mandatory gratuity charges to customers under legislation that was approved by the Assembly Consumer Affairs Committee

The bill would prohibit a restaurant from charging a mandatory gratuity unless the fee is disclosed “in a prominent manner” on the menu, at the entrance to the establishment, on the patron’s bill and, if applicable, on the restaurant’s website.

Under the proposal, restaurants that fail to comply would face escalating civil penalties. Violators would be subject to a $1,000 fine for a first offense, $2,500 for a second offense and $5,000 for a third and each subsequent offense. Each day a violation continues would constitute a separate offense, though the bill specifies that no more than one violation may be charged per day.

Penalties would be collected through a civil action under the state’s “Penalty Enforcement Law of 1999,” with the Superior Court granted jurisdiction over enforcement proceedings.

The measure supplements New Jersey’s consumer fraud statute but does not apply the penalties provided under that law. Instead, it establishes its own penalty structure.

If enacted, the law would take effect on the first day of the sixth month following its enactment.

Supporters say the legislation is intended to ensure transparency for diners, particularly as more restaurants add automatic service charges or gratuities to bills.