More restaurants embrace trend of putting health care surcharges on diners' checks

[zenkai]

A few restaurants in Austin, Texas, are the latest to ask diners to chip in a little extra for the sake of their employees’ health and well-being.

Foreign & Domestic, in Austin’s North Loop, and Hoover’s Cooking, in Cherrywood, have recently added surcharges to patrons’ checks to help cover the cost of health insurance and paid sick leave, respectively.

Foreign & Domestic’s optional 3 percent surcharge was added to each bill after co-owners Sarah Heard and Nathan Lemley started providing “great” health insurance for employees as of Jan. 1, but patrons can request to decline the charge — though Heard told Fox News that most diners haven’t.

“Our guests have mostly been not only accepting, but excited about the practice,” Heard told Fox News. “Since January 1 we have had less than five guests ask to have the fee removed.”

Lemley further told KVUE that Foreign & Domestic chose to institute the surcharge rather than raise the prices of food, which he said would “actually cost the guest more” than 3 percent.

Foreign and Domestic informs customers of its optional 3 percent surcharge at the bottom of every menu. "If you would like to have this removed, please let your server know," the text reads.

Hoover’s Cooking, meanwhile, institutes a mandatory $1 “community value contribution,” the details of which are outlined in a note from owner Hoover Alexander, which is provided with menus.

“Just as we value you as a patron, we want to do right by our team of cooks, servers and support staff. An extra dollar might not seem like a lot, but added to your bill, you’re helping provide Paid Time Off [PTO] for each and every employee at Hoover’s Cooking,” the note reads in part.

“The extra portion of comfort and security PTO brings means that the staffer is healthier, happier, and they enjoy working at Hoover’s because our patrons show they care,” Alexander added.

Though relatively new in Austin, however, the idea of a surcharge to pay for health care costs incurred by employees is not unheard of in major U.S. cities.

Earlier this year, the owners of Fat Rice in Chicago instituted a 4 percent surcharge to cover costs including employee health care, according to the Chicago Tribune. Another nearby restaurant, Daisies, added a 2 percent surcharge in 2017, CBS Chicago reported.

As of October 2018, two sets of restaurant owners the Minneapolis area, who oversee a total of at least 11 restaurants, had instituted “health and wellness charges” to help offset the cost of employees’ health plans, according to WFMY.

Diners in San Francisco, however, might be the most familiar with the concept, as many restaurants have included an “SF Mandates” or “Healthy SF” charge to checks, following an ordinance that requires employers of businesses with at least 20 employees to set aside money for health insurance, paid sick time or parental leave, as detailed in a 2018 San Francisco Chronicle article.

Over in Austin, Heard claims the law is on the restaurateurs’ side, too, telling Fox News that Foreign & Domestic has received the go-ahead from the attorney general, via the Texas Restaurant Association.

In Foreign and Domestic’s case, Heard specified that the restaurant is using the funds from the surcharge toward 50 percent of employees’ health insurance premium, with the employee covering the other half. Many have opted in, though it’s not mandatory, she said.

And while only a handful of the restaurant’s diners have complained, Heard said the practice still has its critics — although most of them never come through the dining room.

“We have received the most negative feedback from sources who have never dined with us, may not understand how small we are, [and] are generally unaware of how the [restaurant] industry works.”

Why not just raise your prices 3% instead of just saying, hey this is what we're doing? Sounds like they are trying to charge more and give themselves a pat on the back for it.

[Saucexorzski]

Why not just raise your prices 3% instead of just saying, hey this is what we're doing? Sounds like they are trying to charge more and give themselves a pat on the back for it.

they are just like any business, taking advantage of the current rules.

[Nellise]

Why not just raise your prices 3% instead of just saying, hey this is what we're doing? Sounds like they are trying to charge more and give themselves a pat on the back for it.

RTFA that you posted. It says why. It would cost even more for the customer to do it that way.

[CallMeGrey]

Why do businesses consider any employee cost to be such a 'burden'? There are many costs to operating a business, but apparently treating people fairly is just too much for them to bear. If all the restaurants in the area have to have the same employee costs, then no one is at an advantage or disadvantage. Makes a person wonder who the real "snow flakes" are.

[Sky High]

So what? Either pay for the privilege of eating there or make your own damn food.

[Cizr]

This is stupid just as mandatory tips are. Glad we dont have this crap here in Europe

[RumbleShakes]

Why not just raise your prices 3% instead of just saying, hey this is what we're doing? Sounds like they are trying to charge more and give themselves a pat on the back for it.

If it works for the restaurant then keep doing it. Why would it be better than increasing prices 3%? Because now the business is obligated to spend that 3% on health care for their workers. I'm a Republican with numerous Libertarian views and voted for Trump and like what he is doing. I would recommend never quoting anything out of SF as it's a city going under. They have an extremely high cost of living, homelessness, and declining tourism. It might be the next Detroit.

[Evil Midnight Bomber]

Why not just raise your prices 3% instead of just saying, hey this is what we're doing? Sounds like they are trying to charge more and give themselves a pat on the back for it.

I'd be much happier with a restaurant that said "This is what we're doing" than one that just hiked it's prices with no explanation.

[RumbleShakes]

This is stupid just as mandatory tips are. Glad we dont have this crap here in Europe

I heard from every European that I've met they don't tip at restaurants in Europe. Is this true? I know they tip other people like delivery men.

[Hilhen7]

Why not just raise your prices 3% instead of just saying, hey this is what we're doing? Sounds like they are trying to charge more and give themselves a pat on the back for it.

It's a completely optional charge. It's actually pretty smart because you won't lose any customer over a price increase.

It's the same reason why restaurants don't fold the tip into the bill.

[Nellise]

So what? Either pay for the privilege of eating there or make your own damn food.

It's a bit sneaky of the restaurants to do this. Don't put it on your customers to have to choose whether you treat your employees well. I shouldn't have to be making moral decisions about the health of your employees if I want to eat at your place.

[The Stormbringer]

I heard from every European that I've met they don't tip at restaurants in Europe. Is this true? I know they tip other people like delivery men.

It's because waiters and waitresses at restaurants in Europe tend to make more money on average than here in the States. Here in the USA, they typically make under minimum wage and have to use tips to make up for that, or if they fail, the employer then has to pay them enough to fill that gap.

[Pannonian]

It's because waiters and waitresses at restaurants in Europe tend to make more money on average than here in the States. Here in the USA, they typically make under minimum wage and have to use tips to make up for that, or if they fail, the employer then has to pay them enough to fill that gap.

At least in my country it is normal to tip waiters. Not the cashier in a burger restaurant of course. But in a "real" restaurant, not tipping is rather frowned upon. 5-10% is normal.

[Mormolyce]

Your employer trying to guilt customers into tipping employees to get them health care is some fucking dystopian shit.

This is stupid just as mandatory tips are. Glad we dont have this crap here in Europe

Europe pays service staff a decent wage.

You know that in the US, not only does their minimum wage stink, but employers can pay employees below minimum on service staff because they're expected to make up the shortfall on tips? So yeah, those tips are literally part of the living wage for those poor bastards.

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I heard from every European that I've met they don't tip at restaurants in Europe. Is this true? I know they tip other people like delivery men.

I think it varies by country in Europe?

In Australia, tipping is very rare (I would say unheard of but some hipster places do it sometimes I think). Most Australians expect not to tip staff. Our minimum wage is considerably higher of course...

[cuafpr]

some likely do it because if they just raise prices people will complain and/or go elsewhere. At least this makes it clear why you are paying more vs just going in and being charged more.

[Cup of Tea]

I don’t eat out very often but when I do I would certainly expect to leave something in terms of a tip for the staff. Unless of course the service was truly terrible I suppose. I can only speak for my social circle but I don’t know of anyone who wouldn’t tip here in my little corner of the UK.

Actually I went out for a big family meal recently, food was horrible, unfortunately, but the wait staff did their best under very trying circumstances and so we did leave a tip.

[GreenJesus]

Smart. No one is going to ask the person that would be benefitting from that tip to take it off. It's just awkward as hell. So nice of them to have it be default and force the customer to take it off.

[Xerra]

Romania often has a tipping system, though the tradition was rooted in the communist hold on the country and was executed more as a bribe so a person would actually do their job. Since then its been just tradition now to tip people though the communist state their has fallen.

[zenkai]

RTFA that you posted. It says why. It would cost even more for the customer to do it that way.

Just take the average they make and up the prices that %?

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It's a completely optional charge. It's actually pretty smart because you won't lose any customer over a price increase.

It's the same reason why restaurants don't fold the tip into the bill.

Well most do on parties that are 6 or more.

[Nellise]

Just take the average they make and up the prices that %?

I'm sure they know how to increase the price if they want to, but doing it as a surcharge probably lets them count it differently than normal revenue for taxes and accounting, so it's "cheaper" for them to do it this way.