Restaurants Pass Healthcare Costs to Guests

Apr 18, 2015

Last week while on a Discovery Tour in Los Angeles with a lovely, well-known client we are not yet able to disclose, we spotted a restaurant human resources practice that’s been popping up across the country and Los Angeles in recent years: Service surcharges, up to 4.5%, that allow the restaurant to provide its employees with healthcare coverage.


A number of restaurants in San Francisco have been tacking on a dollar per guest long before Obamacare, but guests are divided in how they feel about the charge. At Huckleberry, our cashier told us that patrons regularly acknowledge the extra charge, some more vocal or miffed than others. But while a few have asked for the additional request to be removed, people are generally in support of the initiative.


While non-fans of the added cost are put in a precarious position, not wanting to seem cheap or heartless, much of the pushback and hesitation to contribute may be in the in-your-face reminder of the additional payment. Huckleberry prominently displays its extra charge at the register, while countless other concepts leave the added fee in the menu’s small print and as a line item when the check arrives.


While it’s possible (though tough) to work this cost into menu items, making the advocacy statement is a major component of restaurants who take this approach. Love it or hate it, healthcare surcharges are likely here to stay.