Starting Jan. 1, Minnesota officially adopted a ban on “junk fees,” additional fees that include anything other than mandatory gratuity or a credit card processing fee. That means bidding farewell to the much-debated “health and wellness fees” enacted by several local restaurants, for one.

But hospitality industry advocates say the new law may be a bit of a double-edged sword. While consumers can expect not to see any surprise fees on their bills, several businesses say they’re already bracing for lost revenue.

For some, that could mean price increases, counter to the law’s intent.

The law states that “a person or business offering services where the total cost is determined by consumer selections and preferences, or where the total cost of the service relates to distance or time, must clearly disclose all factors that determine the total price, mandatory fees associated with the transaction, and a statement that the total cost of the services may vary.”

Here are a few important things to know about Minnesota’s new law.

#1: Not all fees are banned.

The goal of the law is to improve price transparency for consumers. The idea is that the price seen on menus is the one that consumers pay.

But it’s important to know that the law isn’t a blanket ban on all types of fees.

According to the Minnesota attorney general’s office, mandatory fees and surcharges that must be disclosed in the total price advertised, displayed, or offered include “any fee or surcharge that must be paid in order to purchase the good or service; is not reasonably avoidable by the consumer; and a reasonable person would expect to be included in the purchase of the goods or services being advertised.”

#2: Businesses are responding to the ban in different ways.

Despite the law’s intent to help consumers, there is a chance it could do the opposite, hospitality industry advocates say. While some businesses are looking to readjust their fees that aren’t banned, others are considering increasing their prices.

Those in the hospitality business say it’s either do one of those two options, or resort to reducing worker salaries and cutting staff, said Angie Whitcomb, president and CEO of local trade group Hospitality Minnesota.

“Our fear is that our employers have capped out on how much more they can increase their prices without driving away consumers, and therefore, they’re going to have to make cuts in the things they use these fees to pay for,” Whitcomb said.

According to the Minnesota attorney general’s office, if a restaurant charges a mandatory fee, other than an automatic and mandatory gratuity as gratuity is defined elsewhere in Minnesota law, it must be included in the total price advertised, displayed, or offered to consumers by the restaurant.

Reducing headcounts, of course, could exacerbate existing staffing issues in the restaurant industry. In 2024, about 45% of restaurants in the United States reported being short staffed, according to the National Restaurant Association.

#3: The ban affects more than just restaurants.

The law’s impact on “health and wellness fees” has been well documented, but it’s worth noting that it has much wider reach. The ban also affects added fees at hotels and resorts, concert venues, auctions, and in the catering business.

The new law generally applies to a business’s banquet or catering contracts signed on or after Jan. 1, 2025, with consumers. Banquet or catering event orders, invoices, or contracts with consumers will now have to disclose the total price—inclusive of all mandatory fees such as a surcharge, liquor charges, or any other service charge.

The same can be said for auctions. Persons selling goods or services in an auction must disclose “in a clear and conspicuous manner any mandatory fees associated with the transaction and that the total cost of the goods or services may vary,” according to the attorney general’s office.

Added fees for concert tickets also are set to go away under the new law, too. Concerts often have convenience fees, which are tacked on when people buy tickets online instead of in-person. Venue operators Ticketmaster and Live Nation have indicated they will comply. Locally, the Varsity Theater, which is operated by Ticketmaster, plans to follow the new law.

It doesn’t stop there: Hotels often have resort fees to cover costs of cleaning or the use of amenities such as fitness or aquatic centers, and under the new law, fees like this will be banned. Ditto for cleaning fees at Airbnb rentals.

#4: Hospitality industry advocates are working on legislative change.

Leaders at Hospitality Minnesota believe the ban takes a “one-size-fits-all” approach, so it doesn’t work for all businesses in the hospitality world, according to Whitcomb.

Whitcomb said different types of businesses distribute their fees in the way that works best for their teams, and the law doesn’t take that into account.

She said her group plans to go to the Minnesota Legislature and ask for a “fee fix,” or a revision to the law so it’s clearer for different types of businesses.

“We agree, consumers should have transparency, but this ‘one-size-fits-all’ legislation is, in our opinion, creating less transparency and doesn’t work for our industry,” Whitcomb said.

#5: The federal government has its own “junk fees” ban that’s similar to Minnesota’s, but there’s a key difference.

In October, the Federal Trade Commission proposed a nationwide ban on junk fees and sent a finalized rule to the Federal Register two months later. The FTC’s rule bears similarities to Minnesota’s, which was formally signed into law in May of 2024. But, unlike Minnesota’s law, the federal rule doesn’t apply to restaurants.

In announcing the final rule in December, outgoing FTC Chair Lina Khan said it was designed to save Americans “billions of dollars and millions of hours in wasted time.”

#6: Travelers beware: “Junk fees” are still permitted at properties regulated by the Metropolitan Airports Commission through June.

While the new law took effect Jan. 1, lawmakers are giving businesses operating at local airports a little more time to comply with the ban.

“Provisions affecting industries where the prices are regulated by the Metropolitan Airports Commission take effect June 1, 2025,” according to a statement issued by the Minnesota House. That would include Minneapolis-St. Paul International Airport and the six other airports under the commission’s jurisdiction.