Restaurants Are Adding Surcharges To Your Bills Now

To cover the costs of healthcare and the rising minimum wage.

Cities and state across the country are making an effort to raise the minimum wage to something that is slightly more livable for the employees that subsist on it. Some of those employees work in restaurants. Instead of their employers raising the prices of the wood-fired pizza or burrata appetizer their customers enjoy, some restaurant owners are adding a labor surcharge to your bill instead.

New on Your Dinner Tab: a Labor Surcharge

The surcharges are added instead of raising the prices because paying $24 for an appetizer at a not-so-fancy restaurant would probably scare customers off.

Many restaurant owners say they have added surcharges because jacking up menu prices can turn off customers who are sensitive to how much a sandwich or bowl of soup should cost. When prices do rise, “consumers often trade down in the types of menu items they order, choosing a sandwich instead of an entree, or they leave off beverages or dessert,” said Bonnie Riggs, restaurant analyst for NPD Group Inc.

At first glance, this seems bad for the workers and good for the employees. It would make sense to raise the prices of the product being served, with the understanding that a bigger bill will yield larger tips and more money for the servers in general. But, these surcharges have been in place in some cities for a a while and thankfully, the servers have benefitted.

In San Francisco, most restaurants have added surcharges in recent years since the city in 2009 required businesses with 20 or more employees to help pay health-care costs, said the Golden Gate Restaurant Association. Gwyneth Borden, the association’s executive director, said surcharges have benefited workers because customers tend to tip off the total bill rather than the food price. “Servers are raking in more money,” she said.

Think about when you go out to eat: how closely do you look at the bill? If someone brought you an appetizer that you didn’t order and you had to tell the server you didn’t order it, maybe then you’d check to make sure you weren’t somehow charged. But in general, when a bill is placed on the table, I give it a cursory glance to make sure nothing seems amiss and then quietly stick my debit card in the slot.

If you’re going out to eat, you’re already complicit in the fact that you’re spending money. A surcharge so that the person whose job it is to serve you that food can have health insurance or a livable wage doesn’t seem so crazy to me. What about you?

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