Who’s Paying the Bill for Restaurant Workers’ Healthcare?

A new trend in San Francisco dining seems to be catching on, and surprisingly, it has nothing to do with food. Eateries all over town have started applying health care surcharges to the bill. Some are adding on 2%-5% of the bill, while others tack on $1-$3 per diner. And diners seem to have very mixed reactions. What’s this all about?
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Effective in 2008, San Francisco businesses with more than twenty employees must provide health care to all staff members who work over ten hours a week. How much health care they are required to offer depends on the size of the business. The mandate comes from the San Francisco Health Care Security Ordinance (HCSO) which most of us voted for. But did voters think they’d be seeing it on their restaurant bills?

The first time I encountered the health care surcharge was late this winter, when I had drinks at the new Water Bar. The menu stated very clearly that the there would be a 4% charge and why. I was actually glad to see it. Too many of my friends & family members are without health care.

I didn’t really think about it again until I read Michael Bauer’s blog post in the Chronicle about how outraged diners at the Epic Roasthouse have been. Epic is next door to Water Bar and they opened on the same day. But I wouldn’t go to either expecting an inexpensive meal—so what’s another 4% that’s earmarked for something so vital as health care?Tipping

The next time I encountered a surcharge was this week at the Buckhorn Grill, a fast food version of the Buckhorn Road House. This time, I was not aware of the charge before I ordered but it was only 2% and when added to a $7 salad to go, the extra $0.14 didn’t seem like any imposition.

But plenty of Yelpers are unhappy . A frequent arguement is that health care is an operational cost. Businesses should raise their prices accordingly rather than add a gimmicky “surcharge” to the bill. Another yelper in this thread said if we have to pay a surcharge for someone else’s health care, it should at least be tax deductable. I thought that was an interesting point. Others commented that if they had to pay the surcharge, they’d be inclined to tip less—effectively making the restaurant staff pay out of pocket.

My take on this is that the Health Care Ordinance clearly effects margins of restaurants and rather just raising the prices, they are providing some explanation to their patrons. I voted for and support the HCSO and I also understand that Health Care costs money. I would not be surprised to start seeing retail businesses follow suit with surcharges. Besides, as other supporters have commented, eating out is a luxury and if I cannot afford the extra 4% then I’ll eat at home. I have a choice.

What do you think?

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7 responses to “Who’s Paying the Bill for Restaurant Workers’ Healthcare?

  1. Personally, I think if their gonna raise prices to cover health care they should list the price total on the menu — NOT list the base price and then wait till the end of the meal receipt to tack on the surcharge!

    If I walk up to a restaurant to check out their menu I want to know the real cost. Not showing the real total on the menu is as bad as phone companies or rental companies that advertise 29.99 a month! and then tack on surcharge after surcharge till it’s almost twice the cost advertised.

    I view it as not exactly explicitly dishonest but definitely somewhat underhanded.

  2. Now that I think about it,
    I think that listing the surcharge may be a passive-aggressive act of protest by the restaurant management. If I remember correctly, restaurant owners were the loudest voices against HCSO when it was on the ballot. I think they are still pissed and are passing both the extra cost, and the feeling of resentment to their patrons. For that reason, and just because it is incredibly tacky, I don’t like it. As a side note, I’d be curious to see an informal survey of which restaurants list a health care charge and which ones don’t with the results broken down by price point. There are many more related stats. I’d like to see, but I’m not going to take up anymore space.

  3. What Colin said makes sense, but there is a reason why they don’t just add it into the price – then customers may stop coming because the prices are too high.

    By tacking it onto the bill, rather than the menu, they bank on unobservant customers who won’t even notice that they’re paying extra charges. This is the same principle behind things like McDonald’s Monopoly game they have (or at least used to have). They bank on many people not collecting the game pieces or even bothering to peel them off to see if they won an instant prize. Sure, they’re offering a million dollar prize, but how many people are bothering to keep up with all of their game pieces? Very few.

    This issue also ties into the issue of tipping. Why not just make your prices so you can pay a fair wage and not have a person’s salary dependent upon the whims and generosity (or lack thereof) of the public. I used to want to open a full service restaurant where our slogan would be “we pay our employees salary, you don’t have to”. There would be no tips. The customers would get good service because that is company policy – not because they’re trying to work up a good tip.

  4. I’m in the same boat as Colin this should not be a surcharge or tax, but then again the whole reason may be to move people to make better choices?

  5. Pingback: sfblogg.com - Blog about San Francisco» Blog Archive » 5% Health Care Surcharges at SF Restaurants!

  6. I definitely know too many people without health care, and agree it is a luxury to eat out.
    It is a bit passive-aggressive on the restaurants’ part though!
    *shrug* I wonder if my favorite sushi place has more than twenty employees… Will have to ask next time. Prices have gone up.

  7. Pingback: SF Blog - The Blog about San Francisco » Blog Archive » 5% Health Care Surcharges at SF Restaurants!

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