Sick restaurant surcharges you shouldn’t have to pay — or should you?

Ward Chartier almost choked on his breakfast croissant he ordered at Oakland International Airport recently.

The reason for his consternation: an item on the bill that he thought he recognized, but hoped he didn’t.

It said, “EmpBen_Srchg” and it came to 12 cents, or about 2 percent of his bill.

“I interpret this to be employee benefit surcharge,” says Chartier, a consultant who lives in San Ramon, Calif. He asked me if I knew anything about the mysterious fee.

I didn’t, so I asked Oakland Airport.

“The Port of Oakland agreed to permit its concessionaires to add a surcharge of up to two percent on guest checks to cover the cost of providing medical benefits to its employees,” Joanne Holloway, an airport spokeswoman, explained. “The businesses are required to post notification of this charge on its menu boards and on the guest receipt.”

Odd items on a restaurant bill aren’t new. In San Francisco, restaurant patrons have faced even higher surcharges on their restaurant bills, which may or may not be used to cover employee healthcare. In Florida, one restaurant chain owner last year imposed a new fee to cover the costs of Obamacare. Oakland’s EmpBen_Srchg was added last May.

But the fee raises a set of bigger questions: Are these extras reasonable? If so, how should they be disclosed? And is there a better way to buy a croissant?

To the last question, Chartier knows the answer. Yes, absolutely. The cost of a pastry should be baked into the price.

“Is this the wave of the future, that we travelers will be nickel-and-dimed by every purveyor along our travel route?” he wonders.

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Fee frenzy

Is a small surcharge on your fast-food bill a reasonable thing? Well, yes and no. It is reasonable for an employer to cover the healthcare costs of employees. But tacking it to a bill without notice is a questionable practice.

Customers don’t really care about the extra costs of doing business, for starters. Even state and local sales taxes are more or less irrelevant to them. All they care about when they’re running to catch a flight is the grand total.

Airport patrons like Chartier anticipate that their bill will be a little higher once you add Oakland’s city tax and California’s sales tax — it adds a total of 9 percent — but in an ideal world, the price they see for that croissant would be the price they actually pay. No surprises.

Add another surcharge or two, and it becomes difficult to estimate the actual price of a meal.

Breaking out healthcare costs as a “surcharge” benefits Oakland Airports’ vendors in an important way: It allows them to quote menu prices that are artificially low — kind of like what airlines did before the Transportation Department ruled that they needed to offer an “all in” fare.

Chartier’s menu didn’t warn about a 2 percent surcharge. It was sprung on him at the cash register, he says.

I know what you’re thinking: what’s the big deal with two percent, anyway? Besides, it’s taking care of sick employees? Don’t you have any compassion?

Of course I do. But what happens when a business decides to break out the cost of rent and insurance as a separate fee, too? You could end up with restaurant bills that look like a car rental invoice. Once you add all the taxes, transportation fees and surcharges, your bill has doubled. (To be fair, most legitimate car rental companies quote a post-surcharge and tax rate. But not all of them.)

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Whose fault is this?

The restaurant business isn’t easy. My grandfather owned and operated a diner in Charlotte for many years, and I grew up hearing stories of long workdays with no weekends. But even my grandfather paid his employees a living wage and refused to play price games with his customers.

The current system, which allows owners to pay restaurant servers substandard wages and then forces workers to rely on tips for survival, seems fundamentally unfair — not just to the workers, but to patrons like Chartier.

Doesn’t it seem wrong to count on our charity to supplement a server’s wages? Shouldn’t a tip be a reward for excellent service instead of something workers depend on?

But the latest surcharge may be a fee too far. Quoting a customer one price but to then add a fee to cover a server’s medical bills makes a restaurant meal look cheaper than it is. And it makes restaurant owners look cheaper than they should be.

Should restaurants charge customers a fee for employee healthcare benefits?

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at Read more of Christopher's articles here.

  • Bill___A

    This is absolutely unacceptable. I will do my best to ensure that I do not do business with anyone who does something like this. Furthermore, the legislators who allowed this should reconsider their actions.

  • polexia_rogue

    “Owners of more than 90 restaurants in San Francisco are under fire for charging customers extra fees to cover the cost of employee health care and then pocketing the money instead of spending it on workers.”

    THAT is my issue.

  • PsyGuy

    I don’t get it, what’s the crime here, it’s $.12? It’s an actual legal fee, and its posted on the menus or some conspicuous place. Sure it would be nice if they just added the cost to the price and posted the menus that way, but does anyone actually expect they are going to get a bargain, or eat on the cheap in an airport? It’s an airport EVERYTHING is more expensive. I pay $2.25 for a bottle of water or soda, that I could get at a grocery store for a $1.00. Gum is 3x the price then the checkout at Walmart. Even McDonalds doesn’t have a dollar menu at its airport locations.
    I use to go to the airport for cinnamon rolls because it was the ONLY location in the city that had a Cinnabon, if I did it really fast I could get in and out of the airport in less then 30minutes and wouldn’t have to pay parking, but a 4 pack of rolls was $30, at about $7.00 a piece, it was an expensive habit.

  • S.Lynn

    I like it because it shows the ones who voted for the current regime some of the prices we’re paying for “free” health care.

  • Jeanne_in_NE

    The “EmpBen_Srchg” is just a political statement by the restaurant/franchise owner. In Omaha, the outgoing mayor decided to balance the budget by tacking on a 2.5% “occupation” tax on all restaurants, which the restaurateurs promptly passed straight through to their customers. The tax often appears on bills as “Mayor’s Tax”. Same thing here. It’s just a cost of doing business, but someone has decided to make an issue out of it.

  • LFH0

    The price that a business chooses to charge is the price which should be advertised. If a business chooses to add some “extra” to an item, and the item cannot otherwise be purchased but for accepting that “extra,” then the advertised price should be inclusive of that “extra.” If the croissants could not be purchased without also paying for the health care of the employee serving the croissants, then the legitimate price of the croissants is not $6.00, but $6.12.

    (On the other hand, taxes, which are imposed by the government and which are merely collected by a business, legitimately are not part of a price. But don’t confuse government taxes imposed on a consumer with government taxes imposed on a retailer which then chooses to charge its consumers a “tax recovery fee” . . . such fee is not mandated to be imposed on a consumer and legitimately should be part of the advertised purchase price.)

  • Carver Clark Farrow

    I’m not sure that can be done. Businesses are generally free to charge what they want as long as there are adequate disclosures

  • Emanuel Levy

    It would not allow me to vote but that’s OK because I could not vote either way.

    If the additional cost is added into the cost of the food directly then you being charged sales tax on that “non-food cost”. I wonder if by breaking it out are you avoiding being taxed on that. If so it may end up saving money in the long run if the food cost was broken out of the rent/utilities/benefits/employee pay amount.

  • Ian Parrish

    Just a quick correction for the article, the total sales tax rate in Oakland including both the state and city component is 9%. There are not separate taxes but one tax that is the state 7.75% plus an extra 1.25% for the local municipality.

    Now for the real point is that these fees are proliferating wildly in California. There have been a lot of issues with “Healthy SF” including the one you link to. Disclosure is hit-or-miss. I sure think employees should get health insurance, but extra fees like this are not the way to do it.

  • Carver Clark Farrow


  • Carver Clark Farrow

    Assuming a very high ten percent sales tax rate you would save 0.2% of the cost of your meal. On a hundred dollar meal that would be twenty cents.

  • citizentraveller

    This is just another example of small but significant extra charges imposed by businesses every day. The previous article on dynamic currency conversion is a good example, along with the range of airline charges for things that we once took for granted, bank account keeping fees for all sorts of ‘services’, hotel charges for anything except the bed and toilet, and so on.

    I always dread a notice from my bank saying “we have ways to save you money on fees”, what they mean is that fees have increased but I can save on fees if I deposit a ton of money earning zero interest and only make a withdrawal once in a blue moon.

  • Dominic

    For a European, this is shocking because it means “in an ideal world, sick employees should be fired, but this d… president forced us to shell out money for such unproductive things as caring about our employees”. And also, in most parts of Europe its illegal to advertize something for 10 and ask for 10.2, you must advertize “all taxes included”, small print on the menu won’t do. Easyjet used to promote plane trips at EUR29, but when you added everything the bill was over 80. This was made illegal, in order to promote fair business practice, fair for the customers and fair for the employees. Otherwise you’d have a “wages tax”, a “chair and table rent tax”, a “breathing air tax”, a “clearing snow on the parking lot tax” on your restaurant bill, and what not.

    And hey, if there is a new law that rises prices (by something as astronomical as 2%!) for the benifit of the previously un-benefiting, then we should happy for them! The people serving the ones taking planes, often cannot afford to take a plane anyway… Or if they do, it will be without going to the airport coffee shop for overpriced coffee and croissants…

  • Dominic

    And speaking about other “private taxes”, I bet the “paying the boss” tax and “paying the shareholders” tax would never appear on the bill anyway…

  • Thanks. I fixed that.

  • Alan M.

    The restaurant made the argument to the airport in order to increase prices without paying the airport concession fee. I doubt the airport was able to make the argument that the restaurant pay the airport fee on top of the “benefits” surcharge although it’s irrelevant what it’s used for and it’s the airport authority’s fault that this occured.

    While it appears like a surcharge the intent was to increase profit at the expense of the airport… quite clever really because it worked for the restaurant; except the outcome looks like the author’s argument and will become pervasive now and hurt the rest of us :(

  • Its a political statement by the restaurant. They are simply adding a line item for an additional tax imposed by the government (remember the SCOTUS ruled that ObamaCare is a tax) on the business. While not a choice that I would make, it is a choice allowed by the local government.

    A different tactic than a local business here that reduced almost all of their employees from full time to 29 hours a week (including managers) so they don’t meet the ObamaCare threshold. They added additional staff to make up the difference and replace those that left.

  • mbods

    And that’s the point, adequate disclosures, which Mr. Chartier didn’t get, at least not that he noticed.

  • EdB

    In the posted cited above, it was NOT disclosed. And I for one expect businesses to roll all costs into the price they quote on the menu. While adding these surcharges may be legal if disclosed properly, I find them unethical and will refuse to do business with establishments that engage in this behavior.

    Also, as one post above mentioned, how are these surcharges policed to guarantee they go where they are suppose to? If the business charges a fee for something but does not apply the funds collected to what they claim it to be used for, I personally feel that is fraud on the part of the business.

  • Margery Wilson

    Rather than being a fee for employee benefits, it gives me the message that the employer resents having to pay benefits. Or is pouting over Obamacare. Or both. I believe benefits are the cost of doing business, and that ALL employees should have benefits. I understand competition often drives the pricing of menu items, but as a consumer — especially in an airport — a few cents one way or another makes no difference. Having the itemization on my receipt — which, as I said, smacks of a political statement by the company — raises my ire to the point I’d shop elsewhere.

  • Casa Mariposa Panama

    I suggest this practice is occurring because restaurant owners want to make a statement to the public about some of the costs they face in doing business. That is, they hope that these charges will get some press time (like what is happening) in an effort to get the legislators to change their ways. However, I doubt this practice will have the desired effect.

    Having said that, is it fair to the consumer to do this? In my opinion, NO it is not, because the menu price of the meal IS then artificially low and that is just simply the wrong way to treat your customers. Consumers are not uninformed about the rising costs of business, and hence the price of a meal should reflect that, that is, the true advertised price which should include any incidental costs faced by the restaurant owner. If, in this case, the restaurant owner raised the advertised price of the meal by 12 or even 15 cents, is anyone really going to care? If you are at a busy airport and just want a quick meal, are you going to run all over the terminal to find the lowest priced croissant? I doubt it.

    What is at issue is treating the customer with the respect they deserve, and it begins by charging only the price that is advertised. Nothing more. I believe that far too many hotels, airlines, restaurants, etc, etc, etc have become too involved in marketing games and have lost sight of the one simple truth in business:


    Plain and simple. As always, just my two cents worth.

  • Joe_D_Messina

    Word of warning, Chris. I just got a pop-up here on your site from a “concern8 . info” trying to get me to immediately update my Flash Player software. They’re a known scam when you Google them.

  • John H.

    I had a book contract that specified a 15% royalty on the price of each book sale less publisher’s expenses. I assumed expenses meant anything related to the physical printing, shipping and advertising/promotion. Expenses did include those items but everything else — phone calls (unspecified reasons for), office supplies, and everything except new shoes for the editor’s children. It was a small press, and it was a press with tiny ethics as well. Add-on charges that surprise are the idea of bean counters who Dante would have sharing a lower circle in Hell in a revised “The Inferno.”

  • Cam

    It seems like an overtly political move to me, and would do what I could to avoid a business that took such a stance.

  • As others have mentioned, this sounds to me like a political statement being made by business owners who oppose Obamacare – basically their way of saying that there is a real cost to the “free” health care you were promised. I won’t devolve this thread in to a redux of the 2012 election, but I for one happen to agree with the statement in general, and would in fact be more inclined to shop at a business that makes such statements. What DOES bother me, though, is the underhanded way in which this statement is made; tacking on a surcharge at the bottom of the bill is no better than a “resort” fee, in my opinion. I would have preferred that he just raise his prices 2% across the board, and then prominently display all over his store and on his menus that the price increases are due to Obamacare, or whatever else it is that he’s protesting. As it is, it appears sneaky and underhanded.

    While we’re on this subject generally, CA sure does seem to have gone fee-crazy these days. I was vacationing there weekend before last, and literally every gas station in SoCal has adopted a surcharge for credit card transactions. I refuse to patronize businesses that charge more to pay with a credit card, which made it awfully difficult to find a place to get gas.

  • Daddydo

    There is a cost of doing business. If fees are posted and you go into the establishment to partake, then you are agreeing to those fees. If they are not posted, then I would fight them, either through the manager, or a major reduction on the tip that reflects that hidden fee.

    The #1 complaint is a group pre-paid tip; usually the worse service offered. If the service is great, I still decide the tip, it is my money! I tip 20% for good service and 0 for poor. The waiter has no control.

  • I’m on it. Thank you for the warning.

  • EdB

    If a business wants to make a political statement, let them do it by raising the advertised price but break it down on the receipt. In the example here, post the price as $6.12 and then on the receipt, list the item for $6 and the $0.12 as a separate item. End result is the customer knows the price up front but the merchant can show them where the money is going. I see this at a lot of gas stations where they have a sticker breaking down the price per gallon with the taxes being paid.

    And speaking of gas stations, in California, merchants cannot add a surcharge for using a credit card. However, they are allowed to offer a discount for using cash. It’s all in the wording and how the price is advertised. Also, there is a difference between a surcharge, a fixed amount added to the total, versus a different price per unit when using a credit card.

  • pauletteb

    Things may have changed, but when Australia instituted its form of GST, that 10 percent was included in prices, not added on. The price you saw on a product, including hotel rooms, was the price you paid.

  • emanon256

    When I first saw it, I thought it was the Emperor Ben surcharge, and that Ben was the franchise owner.

    I agree, I do not want to see business making a political statement. I believe that politics are personal belief’s, and once a business starts pushing it down customers throats, regardless of their side of the debate, they have crossed a line and are no longer being professional. I will no longer do business with these establishments.

  • pauletteb

    Totally agree; they might “fool” me once, but I’d never do business with them again.

  • y_p_w

    Technically they are separate taxes, but they’ll be seen on a receipt as a single tax rate that isn’t broken down. I don’t believe Oakland has a city sales tax, but several cities in Alameda County do. The non-state portion of the sales tax can go to up to three specific entities, including the county, city, and special districts (BART is one).

    There’s an Indian casino in Placer County that only charges a special county sales tax on purchases, even though the county doesn’t have an additional sales tax other than the standard state rate. I understand it’s because they negotiated this with the county, which would otherwise be receiving a share of the state sales tax. There’s another one that actually charges the full rate (apparently part of the deal with the Governor to agree to the gaming compact) but some of the restaurants don’t disclose that and just fold the sales tax into the price while other charge for it.

    I remember when 6% was the standard California sales tax (I was charged that for mail order) but most of the San Francisco Bay Area counties charged an extra 0.5% that went to BART.

  • Once again, the system in place in many (most?) European countries is more reasonable. The bill includes taxes (which in Europe covers health care) and the basic gratuity. When you order food, you know what the check will come to when you are set to pay.

  • Bill___A

    There is a big difference between GST / VAT and an owner adding a charge for their employee benefits. Should we, as customers, be able to deduct an “incompetency” charge when they can’t figure out how to run the till or are too slow? It needs to stop somewhere.

  • y_p_w

    That’s actually pretty sleazy.

    And of course the issue there is a specific requirement for businesses in San Francisco.

  • emanon256

    I agree on tipping more for great service, and less for poor service. I also agree with fighting the additional fee if it wasn’t disclosed. But reducing the tip because the owner decides to charge a fee is not fair to the waitstaff who is working for and depending on that tip.

  • Bill___A

    And I am free to avoid Oakland. Or California, or the United States for that matter.
    Seems there weren’t adequate disclosures here and at this point, with this all new to me, I am not okay with it and will govern myself accordingly. I also think it is absurd to be allowed to pay people $3 an hour or whatever it is and expect them to survive off tips.

  • EdB

    I understand the concern about reducing tips, but at least in California, the employer has to pay the employee minimum wage if they don’t make enough in tips to meet that amount.

  • pdxmom

    it’s not ‘imposed by businesses.’ It is a new tax imposed by the federal govt (businesses do not impose taxes).

  • pdxmom

    someone has to pay. and taxes aren’t paid by businesses – they are paid by customers, employees or owners. that’s just the way it is. if they can’t collect more money for higher costs of regulations, they will go out of business and no one has a job. is that better?

  • pdxmom

    it’s not to increase profit. (do you know what profit is?) – it’s to pay an increase in taxes, and they are passing it thru to the customer, as any company does.

  • pdxmom

    it’s at an airport. loyalty isn’t the main issue.

  • EdB

    I missed where they said it was a tax imposed by a business. Businesses imposes charges all the time. They just have to disclose them up front.

  • pdxmom

    the problem it seems to me, is that it’s an increase in a local tax, and nowhere when one goes to shop does anyone really disclose what sales tax is (and we are all well aware, given the recent legislation in congress, that there are a zillion different sales taxes in the country). In an airport it would be doubly important to disclose these fees and sales taxes – but no one does (and rarely is it done in a hotel either – where you have ridiculous taxes tacked on to a room and a rental car, etc etc).

  • pdxmom

    the legislators always create more taxes and fees for businesses – they are the reason for this screwed up tax system in the first place.

  • Christina Conte

    I took my daughter and friends to see a movie last Friday and there was a notice on the window stating that the AMC gift certificates which are purchased at Costco will incur a $2 surcharge as of July 8th. I told my friend who constantly buys these as gifts and she was outraged (as was I) because now she feels it’s inappropriate to give someone a gift when they will have to shell out more money to use them. I agree, it seems wrong for them to be able to do this, just as much as adding the health care charge as you wrote about (who knows, maybe that is the reason for this fee, too.)

  • EdB

    Taxes are paid by businesses. There are all kinds of taxes imposed on businesses. Businesses recoup those costs in their profit margins of sales. The profit margin is suppose to cover the costs of doing business and generate a profit. Non-business taxes, like sales taxes, the government requires the business to collect and that is normally shown as a separate item on the receipt.

  • Carver Clark Farrow

    That’s the same argument that is made every time a consumer or employee friendly law or regulation is made. Businesses (and I’m pro-business) yell and scream that they cannot afford minimum wage, safety regulations, environmental regulations, disclosure laws, labeling laws, etc. They claim they will go out of business and basically an economic apocalypse will occur. This of course has not happened

  • EdB

    Now wait a minute. Didn’t you just say in another post businesses don’t pay taxes?

    Ah yes, here is your statement:
    “and taxes aren’t paid by businesses”

  • Carver Clark Farrow

    Question. Does the government levy the 2% tax on the restaurant’s gross receivables or just on the taxable income?

  • Carver Clark Farrow

    I am not a fan of the tip being included in the bill. I much prefer being able to choose whether or not to tip. Its not that difficult to figure out the tip.

  • emanon256

    That is just wrong on so many levels.

    We have a law in Colorado that a gift certificate is redeemable for up to five years from the date or purchase for the stated value and or service, and that no surcharges or fees of any type can be added when it is used. Of course, that’s only a state law. But the fact that anyone woudl add a surcharge to a pre-purchased service is just wrong and should be illegal.

  • Bill___A

    But they didn’t. This is a business recovering some of their costs. They might as well have a napkin fee, an employee training fee, a “slow times but we still have to pay people” fee, a cash register fee, etc. It should be price and taxes, period. Tip optional. And for the record, take out, fast food, etc, should not have any tip. Tips are for when you have table service.

  • William_Leeper

    Currently it is $2.14 and I agree with you!

  • Christina Conte

    California law is that gift certificates/cards never expire, so it seems as if it would be illegal that one must pay more in order to redeem that “unexpirable” voucher. Hmm…Chris, is this something you could look into?

  • Alan M.

    You are correct in that I make a simplistic argument and the numbers aren’t huge. However, I think I’m correct in saying that the restaurant, when hit with an increase in tax on wages, is increasing it’s profit through this mechanism.

    https://app.sugarsync dot com/iris/wf/D780206_4736491_6819922

    is a spreadsheet I put together to show you what I mean.

  • EdB

    Was that a California based AMC theater? Because as you mentioned, California law prohibits businesses from imposing surcharges on gift certificates like that. But then, I haven’t read that actual law and wonder if it is like the credit card surcharge law. It is a civil, not criminal, code violation and the consumer has to take them to small claims court to recoup actual costs. In other words, the law has no teeth and businesses know it and will blatantly violate it knowing the consequences are less than the potential gains.

  • amystery726

    If this is something that the owners are going to levy on customers, I guess I figure they’d calculate that as part of the cost of the food, NOT as an additional fee. However, a flat 2% isn’t exactly fair…If a restaurant bill comes to $1000 for a big party, and the customers are already paying a generous tip on top of that, one would think the owner of the restaurant is garnering a rather larger than usual contribution towards their employees’ insurance costs. Granted, it isn’t a large amount in the grand scheme of things….

  • amyfrey726

    I need to clarify – I’d pay the 12 cents for their insurance – gladly. Just wish it would be rolled into the total cost without needing to separate it out. Even the nominal fee on the $1000 restaurant bill doesn’t bother me. I just don’t need the itemized receipts :D I am willing to help those at the lower end of the wage scale get fair and decent health care.

  • emanon256

    Coffee shops could add a cream and sugar fee.
    Doughnut shops could add a glaze fee.
    Any and all places that advertise could add an advertising fee.
    Other places could add a receipt paper fee, restroom cleaning fee, utility surcharge.
    Restaurants could add a POS System maintenance fee.
    The list goes on and on.

    I think this is all ludicrous. I completely agree, all of this including employee benefits should be lumped into the cost of doing business and the prices set accordingly.

  • EdB

    Don’t forget the other government fees the business also has to pay (same type this health insurance fee is) like the business license fee, health inspection fees, fire inspection fees, etc. There are lots of government imposed fees and if they were allowed to break them all out, could you please image how long that recipe tape would get? :)

  • Bill___A

    What about customer discounts?
    – slow service discount
    -No clean tables discount.
    -poor quality condiments discount
    Oakland Airport has crossed a line here and it is a bad line to cross.

  • Charles

    They are charging this surcharge now. You can’t blame that (or any other sleazy company’s “Obamacare taxes) on Obamacare because it has not even gone into effect yet. The restaurant is not paying any “Obamacare” tax at this time. So, this charge is an arbitrary charge the company has imposed, not some federal tax that is being passed on to the consumer.

  • Charles

    I keep reading comments that indicate that this is okay because it is passing a federal tax on to the consumer. That’s nonsense. a) the relevant parts of Obamacare have not even gone into effect, yet and b) health insurance is a product purchased from a private company. The federal government is not at this time making them purchase any insurance. Even when the programs go into effect, all it will do is require companies to provide health insurance, something they should be doing, anyway. It is not charging them a penalty unless they decide they don’t want to provide health insurance. In that case, the surcharge would really make no sense.

    And before someone knee-jerks: “but the Supreme Court ruled that Obamacare is a tax”, please don’t. They didn’t rule that. They ruled that the individual mandate is a tax.

  • cahdot

    having us pay for the aiport workers union to get them healthcare benefits sucks it is the same at the san fran airport so there went their tip it is a tip or hc insurance will it go away with obamacare>???u know the free insurance everyone thinks is so great the unaffordable healthcare

  • ExplorationTravMag

    The poll didn’t go far enough, in my opinion. Should restaurants charge customers a fee for employee healthcare benefits? No. Are they going to? Yes.

    Obamacare is the biggest boondoggle in the history of the country and it’s cost is going to be astronomical, to say the least. Because of this, companies are having to make the hard decisions regarding offering benefits to their employees. Do they drop them entirely or ask the customer to bear the brunt of it? Looks like they chose to let us, the consumer pay for it.

    It’s easy to say, “I won’t give my business to anyone who does this” because the truth of the matter is, all companies will be doing this before it’s all over, some just won’t put the line item on the bill showing they’re doing it. We, the consumer, will see it in rising prices and higher taxes.

    Be careful what you wish for, voting public, because you just might get it.

  • ExplorationTravMag

    And the emperor is finally showing he has no clothes. Biggest fraud committed on the country for as long as we’ve been the United States of America, this “free” health care.

  • ExplorationTravMag

    And if your pay goes down because your company requires you to pay more so someone else can have the same benefits you now enjoy, is that okay, too? Are you willing to give up more of your paycheck to take care of someone else, someone you don’t even know and aren’t related to?

    If so, I’m happy to send you my mailing address or Paypal account e-mail so you can start sending me that $200 a paycheck we no longer enjoy since Obama’s “No taxes on the middle class” went into effect.

  • Timothy Woody

    While a pain in the posterior, this is perfectly acceptable. Showing the extra costs that government regulations and programs bring is one of the best ways to keep the public informed. If we are informed we can make better choices in choosing our representatives.

  • Christina Conte

    Yes, Burbank, CA. Will check w/some atty friends to get more info.

  • sunshipballoons

    I’m indifferent as to whether or not restaurants charge these fees. I presume that if they don’t charge the fee, it will eventually be incorporated into the price of food, just like the cost of salaries, electricity rent, etc. However, I have a big problem when I’m charged this fee and it isn’t disclosed up front, which is common for the SF health care charge in the few chain restaurants left in SF. I’m pretty much 100% sure that this is illegal. It’s a type of bait and switch. Wondering when a good class action lawyer will get in on it.

  • EdB

    Showing the extra cost is fine as long as you don’t show it to me on the receipt without posting you are doing that. I don’t think most people have a problem with a business passing on new costs just as long as it is done upfront, preferably by raising prices. It’s when they tack on a fee with no warning is what people get upset with.

  • doctork

    Will the restaurant help me pay my medical insurance costs? If not, why should I help it do the same. Ludicrous. Delete the charge.

  • FishySounding

    “…legislators who allowed this should reconsider their actions.”

    There is no safer job on the planet than a Democratic seat in California.

  • Carver Clark Farrow

    Oh, I quite agree. Adequate disclosure is always a prerequisite to ethical business behaviour. In this case, the OP did not receive adequate disclosure and shame on the restaurant.

  • Carver Clark Farrow

    They are allowed to break them out, its just that they don’t because we the consumers wouldn’t not accept it. Its just like the energy surcharge that some businesses impose.

  • FishySounding

    If you provide a benefit you have to collect it. They could raise the price, but it comes down to the same things on the bottom line. I like to know how much is going to the biz and how much the state is collecting.

  • Carver Clark Farrow

    That’s a $20 contribution to the employee’s health care. But what’s the difference between that an ten $100 meals, or one hundred $10 meal. Its the same $20 either way

  • y_p_w

    I believe it’s only that paid gift certificates don’t expire. There are plenty of promotional gift certificates or cards that can and do expire, but they’re not paid for directly. I’ve gotten “bonus” $10 gift cards with a narrow window to use them.

    I’m curious as to how Groupon or similar services operate in regards to this law. They’ve said that the merchant will guarantee the paid value indefinitely as credit towards products/services.

  • Kevin Mathews

    Problem with your example is that all things being equal, you’d assume that the party that paid $1000 on 1 bill used up services and space equal to 20 parties with $50 bills…

    That 2% is an average used based on the companies revenues and what the projected health insurance cost is relative to that revenue.

    So if the company had $100K in revenue over a month and their health insurance cost was $2K, they’d assume an extra 2% on everyone would cover it…

  • Carver Clark Farrow

    The amount paid for the groupon remains good even after the expiration date. The “bonus” amounts expire

  • Carver Clark Farrow

    I’m sorry. What are you trying to get at?

  • y_p_w

    Of course most feel that if a business wants to charge customers to help cover the costs, but that’s normally included in the price charged for services.

    I’m just curious how this affects the final bill. Is the surcharge additionally subject to sales taxes as would be a price increase? Could it even be some way that businesses try to get around additional taxes, much like hotels charging “resort fees” that aren’t additionally taxed for sales tax or hotel taxes?

  • Mom English TEACHER

    ” in and out of the airport in less then 30minutes ”
    The correct word is “less THAN 30 minutes” Or do you go in, get your treat and THEN take 30 minutes???????

  • frostysnowman

    Not a separate fee. That’s not acceptable! But if you raise the cost of some things a few cents, we won’t really notice it, and you won’t look like an idiot who doesn’t give a crap about employees trying to pass the cost of health care completely to your customers.

  • DouglasWestfall

    A business is a business is a business — OK, that’s a bit redundant, but it’ true. I once taught marketing and sales (back in the dark ages), and reductions to your expense line — go right to the profit margin. But is it fair to put that onto the consumer? What if the electricity goes up, or the delivery charges increase? Should businesses put that on the bill too?

    Now I write and publish books on America’s history — today, most sales are off the web (once there were book stores aplenty.) Back in the early ’90s when California Governor Wilson began taxing books, we of course added that to our website — it’s the law. But if my costs go up, I do not. It’s called budgeting — I have books that have sold for two decades, and not one of the prices has been raised. But then, I sell more books than I did 20 years ago, so it balances out.

    The point here is retail businesses are price conscious — If my croissant costs more this week, my customers may not buy it. Well, true, but that’s all part of having a business — making it work. So if a business has to raise the price — then so be it — I’m sure I will by next year. Putting a ‘surcharge’ on the end of the menu is simply not having the bravado to put the increase into the price of the product.

    So, grow up boys, and put it where it belongs.

    Douglas Westfall, Historic Publisher

  • y_p_w

    I understand that. However, the particulars about what “bonuses” might expire can get interesting.

    For instance, I can often get gift cards/certificates at Costco for a steep discount. Occasionally I’ve gotten ones that were discounted about 50% from their face value. A 20% discount is more typical. I haven’t heard of any that apply a promotional value that must be used by an expiration date. They’re generally treated the same as gift cards paid for a 1:1 ratio with cash. I’ve also received gift cards as a raffle prize. I suppose the issuer could theoretically say that they have “no cash value” and apply an expiration date, much like I got a gift certificate once when I waited almost an hour for my meal at a restaurant and the manager comped the meal and gave me a certificate. It expired and I never used it.

  • BobChi

    Any “fee” that isn’t a government imposed tax and is not avoidable by the consumer should be in the stated price, period. Boycott places that lie about their prices for dishonest competitive reasons. Baggage charges on flights are OK, because I can choose to check a bag or not. CDW on car rentals is OK because I can choose to purchase it or not. But this is just consumer fraud. Some scale, but fraud nonetheless.

  • BobChi

    Raise the prices, yes, that may be necessary. The point is that the QUOTED price wasn’t raised, so that the customer is deceived into thinking the price is cheaper than it really is. This seems to be an increasingly popular game, and it’s one that should be stopped.

  • PsyGuy

    Depends how much time I had, and how fresh the box of cinnamon rolls was.

  • bettyblanco

    Best response is to never patronize establishments that add on “sneaky” fees.

  • Miami510

    There use to be an old saying about what any company could get away with and what they couldn’t. It was called the Restaurant Rule: The customer has to eat it!.

    With the example at hand, the public has three choices: pay the charge, skip the meal, or bring a sandwich.

    All this is going to be moot in the future. Health care will be detached from employment and we’ll have a single payer system like Medicare for all. It will be paid for by taxes. Many readers may be too young, or not know the history of health insurance: During the Second WW, the government instituted wage and price controls. There still was a competition among employers for the best employees, and offering health insurance was a loophole in the restrictions on wage controls. After the war ended, the practice was ensconced in employer-employee relations.

  • rybashka

    The California minimum wage is currently $8.00 per hour and $10.55 in San Francisco. Also, unlike some other states, any tips given to California workers are in ADDITION to the employees being paid at least the minimum wage. There are no legal “substandard wages” in this state.

  • Bill___A

    Thank you for the information.
    They should pay them more nationwide. Good that California is onboard with it. However, still not okay with the “surcharge” for benefits.

  • Guest

    Are you sure that is the way it works? My reading of the law was that employers just had to make up any difference between that insanely low hourly wages and minimum wage if they don’t get enough tips.

    I found this description but can’t find any reference to where it came from…

    The California minimum wage for tipped employees is $8.00 per hour, higher then the federal minimum wage for tipped employees of $2.13 per hour. The California tipped wage applies to employees like waitresses, waiters, bartenders, valets, and other service employees who earn more then $30 in tips a month.

    Including tips and cash wages, all tipped employees must still earn at least the California Minimum Wage of $8.00 per hour. If a California employee does not earn at least $8.00 including tips in any given hour of work, their employer must make up the difference in cash.

  • jennj99738

    That is ridiculous. If AMC doesn’t like the amount charged by Costco, and presumably they receive a fee from Costco purchase of the wholesale tickets, then AMC should stop selling them to Costco. If I had purchased those tickets from Costco, I would return them and tell Costco why.

  • MC

    Hal, that is incorrect. The CA minimum wage is $8, no matter what. By California law, tips cannot be added to the wage to get up to the minimum wage. Tips are in addition to the minimum wage. California is apparently one of five states that requires minimum wage for tipped employees. And There are 45 other states that should join them. It’s ridiculous to pay these people less than minimum wage because most (not all) people offer gratuities on their service.

    “My employer pays me less than the minimum wage because he includes my tips in my hourly pay. Is this legal?

    No. Unlike under federal regulations, in California an employer cannot use an employee’s tips as a credit towards its obligation to pay the minimum wage. California law requires that employees receive the minimum wage plus any tips left for them by patrons of the employer’s business. Labor Code Section 351”

  • Guest

    Thanks for the clarification. I was trying to find a link for the labor code but was having a brain fart and not having any luck. I also checked the mandatory postings at work and the California required postings don’t have anything about that which is strange. That is something, since it is different from Federal, that I would think would have to be posted.

  • brianguy

    sick restaurant surcharges? eww, note to self definitely don’t eat there anytime soon! a couple of bouts of food poisoning in one’s lifetime is more than anyone should ever have to endure.

    not to sound like a grammar Nazi, but shouldn’t this say “sickening restaurant surcharges”?

  • brianguy

    exactly. which is why I get no grief or guilt about providing a fair tip for the service provided. people comment all the time on the internet on general websites about tipping like it applies the same everywhere. it doesn’t. and any employees here that raise an eyebrow for me tipping 15% or more, just for bringing me a menu, my food not being ice cold, and refilling my water once or twice need to stay in school or work in nicer restaurants. and I routinely tip 20% or 30% on a small check, but people still have attitudes about tipping even here. entitlements I guess…

    and anyone that tries to tell you “no, standard tip is 20%” or “no, it’s 25%” with authority or is stuck in a dead-end job and trying to make themselves feel special.

  • brianguy

    ditto in my local airport a small bottle of water is $3+ and a liter will set you back $5 + tax. yep they’ve got you by the b*lls these places. when I see “surcharge” for anything while traveling (especially for work), I usually just pay it. it’s typically tiny anyway.

  • bodega3

    Yes, the city of SF has several employment requirements that are over and above what the state requires. Businesses with 20 or more employees have to offer health coverage and of course there is the living wage requirement that is higher than the minimum wage the state mandates. These costs get passed on to the consumer one way or another.

  • Someone needs to pay for the affordable health care promised by 0bama.

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