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$1.50 per person surcharge for Healthcare added to your bill....WHAT?!?!

I just saw this on the bottom of a menu in SF..
Your thoughts?

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    1. This has been going on for two or three years I believe.

      1. I think it would give me a heart attack.

        1. I'm a retired senior citizen living on a fixed income. It's all I can do to pay for my own med coverage. I'll be damned if I'm gonna shell out for someone else's.

          18 Replies
          1. re: mucho gordo

            I understand the immediate reaction that someone is passing off their healthcare charges onto you, but anytime you purchase something from a company that provides its employees with medical insurance you are helping pay for it.

            This restaurant could have raised prices by $0.75 an item and probably achieved the same thing. Instead they are making a statement that they provide healthcare to their employees - which in my opinion is a good thing. If it were my restaurant I'd just slightly increase prices across the board to cover it, but I don't think this is something horrible.

            1. re: joshekg

              Agree with everything you wrote. Plus those without health insurance can be a huge drain on an economy sending taxes ever higher. I've seen it listed and not. I DO think it makes a good statement esp. in an industry that hasn't been known for having much in the way of benefits for their employees. And, yes, everything we buy has those hidden costs. I can't remember how many tens of millions of dollars our former employer pays every year for insurance for employees and retirees.

              1. re: c oliver

                Agreed, joshekg and c oliver. And thank you.

                1. re: c oliver

                  I don't think a restaurant needs to "publicize" that it is charging higher prices (or a surcharge) for specific employee benefits.

                  What's next?

                  "Surcharge of 1% for extended employee bathroom breaks"?

                  "Please tip at least 25% to provide for maternity/paternity leave"?

                  If a restaurant wants to be a good citizen and provide full benefits, just do it.

                  1. re: ipsedixit

                    Why stop at employee benefits? In for a penny, in for a pound. I'd like to know how much of the cost of my tuna melt goes toward hiring an exterminator, for instance.

                    1. re: ipsedixit

                      +1

                      Just be a good employer and take care of your employees.

                    2. re: joshekg

                      I would not object to a price increase; just spare me the p c hype.

                      1. re: mucho gordo

                        agreed. If I saw this on the menu it would be the last time.

                        1. re: mucho gordo

                          I don't see it as "p c hype"; to the contrary, I see it as a quiet protest against public policy. The restaurant owners are pointing out that they didn't have to pay for health insurance, you wouldn't be saddled with the surcharge.

                          @Firegoat - if you refused to eat in a place that had this on the menu, your dining options in San Francisco would be limited.

                          1. re: alanbarnes

                            If their rent went up or suppliers charged them more they would quietly raise the menu price w/out calling attention to the reason. The health care issue is a hot item and they're milking it for all it's worth.

                            1. re: mucho gordo

                              Health insurance is definitely a hot issue, and many restaurant owners in SF are unhappy about being forced to buy it for their employees. I won't presume to speak for all of them, but some have expressly stated that their displeasure with the mandate is the reason they're calling attention to it with a separate charge on the menu.

                              1. re: alanbarnes

                                Even with the "surcharge" the health care mandate in SF will inevitably drive alot of the owners of restaurants out of the industry. It's too bad.

                                It's not just the cost of providing (or subsidizing) health care insurance that's necessarily so onerous, but all the peripheral stuff that comes along with it -- like medical leave, compliance with COBRA and ERISA, for example.

                            2. re: alanbarnes

                              I see it as a noisy protest, in a state that is a ticking time bomb facing imminent bankrupcy with a $17 billion annual deficit. Soon, only your $120,000 a year prison guards with 85 IQ's will be able to afford to eat out. It is the wrong way and the wrong place to protest.

                              1. re: Veggo

                                Veg, I'm not sure I understand what you're saying. That the requirement to pay for health insurance is fine but the protest isn't? SFers love to protest, ya know :)

                                1. re: Veggo

                                  There are no prisons in SF. The Healthy San Francisco program is local; the problem with the correctional system is state-wide. Protest locally, go bankrupt globally, I guess...

                            3. re: mucho gordo

                              You mean as supplemental coverage mucho gordo, no? As a senior, you are covered by Medicare (for the first 28 days) and then Medicaid (if you qualify) for any long term care needs after 28 days.

                            4. Typical of industry these days to add business expenses as add-on fees rather than including them in the up-front price of the item or service being sold.

                              1. I agree that this is a good thing for San Francisco to have, but from reading the article linked above, I feel those who just "tack on an extra dollar or two" for every single customer is making a profit off something that's supposed to benefit society, not steal from them (perhaps "steal" is too strong a word?).

                                If restaurants are charged up to $2 per HOUR as part of this healthcare initiative, then raising the prices on their menu by a little bit (under a dollar per entree, maybe) wouldn't be that big a deal and I wouldn't mind. But to charge each and every person (not party, but PERSON) means that businesses are taking advantage of this policy.

                                I know restaurant profit margins are small, but there are better ways to go about this instead of turning something that's beneficial and good into something that smacks of greed. Sort of like the "Oops, I noticed that the cashier didn't charge me for this ham, but I didn't say anything because it's not my fault he didn't notice it!" sort of mentality.

                                Anyway, that's just my opinion on this...Again, I'm all for raising menu prices marginally for this...it's just how the surcharges listed per person make me feel.

                                7 Replies
                                1. re: yfunk3

                                  I think the problem with 'just' raising prices is that most restaurants that I see use kinda round numbers and I've NEVER seen anything like $11.24. Operating totally in ignorance it seems to me that the diner would make out better with something like $1.50 rather than have everything on the menu go up in price and go up a tidy amount perhaps. The way it makes me "feel" is glad that somebody's finally done something and I like having my consciousness raised. Like you, just my opinion.

                                  1. re: c oliver

                                    I said less than a dollar, but I didn't say odd numbers. It could be 25 cents, 50 cents, 75 cents, 90 cents. I've seen "weirder" entree prices outside of the San Francisco area, so I doubt having something like $11.24 (I see "odd" amounts like that in mid-range+ places all the time) would put people off from ordering.

                                    1. re: yfunk3

                                      Except at fast food places (99 cent burger) I can't remember ever seeing menu prices in anything other than round numbers. But maybe my memory is wrong. And if your wine, your entree, your salad, your dessert all went up in price, that could easily bump the price up more than the surcharge.

                                      1. re: c oliver

                                        Then increases on just the entrees and maybe smaller ones on just the appetizers would be more than enough for the restaurants to cover the amount they have to pay to the city.

                                        One example of non-round numbers in a not-chain store: Cafe du Monde in New Orleans. They obviously set their prices with the eating-out tax of New Orleans and the state of Louisiana in mind because it always comes up to a nice, round number, and the servers don't have to deal with the hassle of loose change. Prices are still very reasonable. I've seen this at a ton of independent delis, eateries and restaurants enough to not be phase by it or even notice it for more than a second in passing anymore.

                                        It's obvious you are trying to argue something different that I am simply not implying, so I'm not going to respond to you anymore.

                                        1. re: yfunk3

                                          yfunk3, I didn't think either of us was arguing at all. Just presenting two somewhat different opinions. If I came across other than that then I apologize. It was not my intention.

                                          1. re: c oliver

                                            Think of this as the "Fuel Surcharge" that was added to all transportation and service call bills a few years ago". This is the true part of the real costs of the "New" Healthcare as reflected in small business management. I believe the increased HC costs will be incorporated, eventually, into retail menu prices; but for now the restaurateur doesn't want his/her patrons to think the establishment is raising prices for more profit. Just letting the customers know that the restaurant's costs have gone up unexpectedly.

                                            1. re: ospreycove

                                              Any sort of price increase would lessen demand. As a result some restaurants will close, usually the shitty ones that are barely surviving anyway. So what? Europe has lots of great restaurants and they charge you for service and VAT.

                                2. It's a buck and a half...Tell me you'll really miss it relative to what you blow weekly on utter nonessentials.

                                  18 Replies
                                  1. re: Kagemusha

                                    Kagemusha Yes it is $1.50/person so if you eat out 4 nights a week with 2 guests, that is $24.00 additional a week; now, that is just for dinner there is also a surcharge for breakfast places lunch cafes etc. Maybe this additional load on the diner will be just enough to require them to cut back a few meals a week taken in restaurants. What happens when 30% of an establishment's patrons decide that they too must go one less visit a week. The restaurant sees its gross revenues tumble and starts laying off employees; if the slowdown continues the restaurant cannot make a profit it then closes its doors......for good and the balance of the workers are now unemployed.

                                    1. re: ospreycove

                                      My point: if you can pop for dinner 4-5 nights/week AND play host, a buck and a half/head would appear inconsequential. Penny-wise, pound foolish methinks?

                                      1. re: Kagemusha

                                        Kage........what about the average diner and his/her cutting back because of the surcharge; and as I stated eventually the restaurant goes out of business creating more unemployed workers? Look at the Macro view, not the anecdotal snapshot.

                                        1. re: ospreycove

                                          Again, it's a buck fifty, the cost of a large order of fries at McD's. Anyone made to sweat by that amount, even double that, at a resto should be cooking at home.

                                          1. re: Kagemusha

                                            You miss the big picture; increases in prices equals LAYOFFS and eventually business closings. More unemployed workers!
                                            I'm out.

                                            1. re: ospreycove

                                              Yep, the business closings due to this tax are terrible. In the six years since it went into effect, the restaurant industry in San Francisco has been basically wiped out. It's hard to find a place to get a meal these days.

                                              Right.

                                              1. re: alanbarnes

                                                I'm for the tax and I agree with you that the restaurants adding the surcharge onto the menu (and most don't) are doing so as a rather passive-aggressive form of protest to prompt indignation and discussions just like his one. However, it is true that more restaurants have opened in Oakland in the last few years because it is less expensive than San Francisco -- for a variety of reasons.

                                                1. re: Glencora

                                                  It's always been more expensive to open a restaurant in SF than in Oakland (or just about any other place in the world). I don't doubt that the incremental cost of providing healthcare has tipped the balance for a few prospective restaurateurs deciding where to set up shop, but to claim that it will cause widespread businesses failures is nonsense.

                                                    1. re: Glencora

                                                      Added costs.....Slim to non-existent margins causes business failures every bit of TAX in one form or another contributes to failures in all businesses. Question......What is causing the current huge unemployment mess???? Answer: business failures and lack of expansion of those who manage to continue. Result of falling demand and increased prices as noted in the hospitality industry.

                                                      1. re: ospreycove

                                                        Taxes contribute to business failures? That reminds me of the old adage, "the inferior workman blames his tools." I thought the unemployment mess/recession was caused by out-of-control banks who placed big bets in the sub-prime market and foreclosed homeowners.

                                                        1. re: scoopG

                                                          If you don't believe taxes have an effect -- and not an insignificant one -- ask the businesses in LA about why so many Hollywood projects are either going out of state or out of the country.

                                                          If you don't think these catering companies, hotels, etc. are hurting b/c of state and local taxes, then more power to you, I suppose.

                                                          1. re: ipsedixit

                                                            Gee, one industry. There's a trend. California's woes are much more complicated than that. And it gets worse. California owes the Feds $9.7 billion in interest on money borrowed during the downturn with payments to start in September.

                                                    2. re: alanbarnes

                                                      Go to the NRA (National Restaurant Assoc.) and look at their published stats. on the health of the industry.

                                                      1. re: ospreycove

                                                        That's a straw man argument if there ever was one. I'm not talking about the health of the industry nationwide. And it's irrelevant to this discussion, since restaurant workers aren't guaranteed health insurance nationwide.

                                                        I'm talking about San Francisco, one of the only places where restaurant workers are guaranteed coverage. There, the restaurant industry is thriving, at least compared to places that are more laissez-faire.

                                                        There's room for honest disagreement as to whether the Healthy San Francisco program is good policy. And there's room for honest disagreement as to whether it's bad form for restaurants to discuss it on their menus. But honest disagreement has to be based on facts. And the claim that providing healthcare to employees is putting restaurants out of business is simply counterfactual.

                                                        Although it isn't nearly so ridiculous as the claim that taxes are to blame for the current economic crisis. Lehman Brothers didn't go under because it had to pay taxes, it went under because it got caught in the middle of a massive Ponzi scheme.

                                                        1. re: alanbarnes

                                                          To say that Lehman Bros. (or Madoff or any other bad actor) caused any type of economic crisis (a statement which I do not agree with) is essentially saying that the gullibility of people caused the economic crisis -- not government policy or intervention.

                                                          There are already laws on the books against ponzi schemes, as well as regulatory structures and rules for the sales structured debts, securities, etc.

                                                          Lehman Bros./Madoff/etc. was the result of human hubris mixed with greed and gullibility, not government policy.

                                                          1. re: ipsedixit

                                                            I was using Lehman Bros as an example of a failed business, not a cause of the economic crisis. That's an issue that's far too complex to fully address here, but only a complete moron would argue that hubris, greed, and gullibility would miraculously disappear if only we didn't have to pay taxes.

                                                    3. re: Glencora

                                                      Also Oakland has gotten a lot more "fashionable" so more people are living there and so there's more demand for restaurants.

                                      2. OK, so upon reading the article it appears that at least some restaurants are charging this as a separate item to protest the government-mandated "contribution" the businesses make to the city healthcare plan. So, since SanFran derives much of its revenue from tourists it's obvious that out-of-towners are being strongarmed into supporting the city's health plan.

                                        4 Replies
                                        1. re: Akitist

                                          And why shouldn't they? Their taxes support local infrastructure the same as residents'.

                                          1. re: Kagemusha

                                            Equable only if the out-of-towners benefit from equal access to the city's health plan. It's not like police services or clean streets.

                                            1. re: Akitist

                                              So if I visit and get run over by a trolley, they will clean me up, provided that I had eaten out beforehand? Now there's a warm fuzzy. Save those receipts!

                                          2. re: Akitist

                                            No different than hotel lodgers' taxes. In NYC for example it's 14.25% plus $2 /night. It's a classic group decision process: "let's screw the guy who's not in the room."

                                            1. Some SF restaurants charge 4% of your total bill; that can add up and you don't really know if the rest. you choose charges extra until you arrive there...many have just made the menu prices higher. I can eat out very rarely now compared to a couple of years ago. Tax is almost 10% so when you eat out here, you're paying at least 30% more for "healthy SF", tax and tip.

                                              I don't think that insurance is all that great, either. I've read that they plan to keep this local one even if a national one gets in place.

                                              1. My thoughts are that I wish I lived in a city as enlightened as SF.

                                                3 Replies
                                                    1. re: Jay F

                                                      It's a special place indeed. Lived there about 20 years and it still knocks my socks off :)

                                                  1. Frankly, I'm okay with paying more to have the people cooking and handling my food be covered with basic health insurance, because the alternative is kind of terrifying. I get that the profit margins are extremely low in restaurants, but I'd rather not have a chef skip a course of antibiotics because they can't afford the doctor, or ignore an infected cut...I don't live in San Francisco, but it's something I've thought about ever since it first became an issue.

                                                      1. re: jjbourgeois

                                                        There's a word for people who punish their server because they disagree with policies set by the restaurant owner that the server has no control over...

                                                              1. re: scoopG

                                                                Something like that. Although my initial suggestions would tend to have fewer syllables and stronger Anglo-Saxon roots.

                                                              2. re: alanbarnes

                                                                +1.

                                                                But I'm weird. I was floored when I realized how many people thought universal health care in America was anything but a good thing.

                                                                1. re: alanbarnes

                                                                  So, if a restaurant has an 18 percent service charge, do you still give a full tip on top of that?

                                                                  1. re: nocharge

                                                                    What on earth does that have to do with ths conversation? I'm being sincere. Don't get it.

                                                                    1. re: c oliver

                                                                      The other reason for the "Healthy San Francisco" surcharge (other than the political protest reason, that is) is to redress the growing problem of discrepancies between the front-of-the-house and back-of-the-house compensation. A restaurant can't legally touch a tip -- it belongs to the server and tipped-out employees. A surcharge belongs to the restaurant and can be used for whatever purpose including offsetting the cost of compensating the back-of-the-house employees.

                                                                      Unlike some states, California has the same minimum wage for both tipped and nontipped employees. When San Francisco jacks up minimum wage and benefits requirements, restaurants that raise prices will only make the inequity problem worse. Assuming that customers still tip the same percentage, increased prices make the tipped employees get even larger tips. A surcharge can be used as an instrument for redistribution of income to the kitchen staff.

                                                                      Some places go further than a health care surcharge. SF's only restaurant with two Michelin stars, Coi, has an 18 percent service charge regardless the size of the party that is "shared by the entire staff". Most customers don't give a 15-20 percent tip on top of an 18 percent service charge.

                                                                      Does that answer your question?

                                                                    2. re: nocharge

                                                                      If a restaurant were to advertise on the menu that servers get an average per-customer minimum wage, would you deduct that amount from the tip?

                                                                      1. re: alanbarnes

                                                                        Of course not. But my point is very simple: A lot of people reduce their tip if there are service charges and I find it hard to blame them. And the health care surcharge is just that: a surcharge that is mentioned on the menu.

                                                                        1. re: nocharge

                                                                          But the cost of participating in the Healthy San Francisco program isn't a "service charge." It's part of the cost of doing business, just like paying employees minimum wage or covering the utility bills.

                                                                          Just because it's mentioned on the menu is irrelevant. Seriously, an owner could sell food for cheap but impose a $5 per person surcharge to cover the rent. Would you take that out of the server's hide?

                                                                          1. re: alanbarnes

                                                                            A surcharge is a surcharge. It may be called "service charge" or "Healthy San Francisco" but it still belongs to the restaurant. The label does not matter.

                                                                            I don't usually pay much attention to the details of how a company compensates its employees. I don't care how much IBM pays its staff, but obviously, it has to be enough to retain the right talent. Same thing with restaurants. So if a restaurant uses surcharges to redistribute income, I don't really care. Same as how I don't care how IBM decides to pay its engineers.

                                                                            Which brings up my original question: Do you tip in full on top of a service charge knowing that if you don't, the server could, theoretically, get screwed?

                                                                            I have a hard time blaming people for reducing their tip in the presence of a surcharge that is advertised as going to the staff. Would you tip in full on top of Coi's 18 percent going to "the entire staff" (so presumably not just the servers)?
                                                                            That was my question.

                                                                            1. re: nocharge

                                                                              Yes, to reflect the satisfaction level of repast enjoyed. Have done this at The French Laundry after a divine three hour+ experience. They even asked after us, knowing the tip was included in their service charge, to make sure we we knew that. In general, I always want to make sure good service is amply rewarded.

                                                                              1. re: scoopG

                                                                                And you would blame people who don't tip 20 percent or so on top of a an 18 percent service charge at any restaurant with satisfactory service?

                                                                              2. re: nocharge

                                                                                I'll answer that. I haven't been in that situation, but I suspect that most diners (busy enjoying dinner and not thinking it through) wouldn't consider that different from a regular tip and wouldn't tip extra. Has nothing to do with the health care surcharge, though. I do not think that most people would tip less because of that.

                                                                                1. re: nocharge

                                                                                  I don't know where you're pulling your facts from, but they're wrong. A service charge belongs to the staff, not the restaurant. So there's approximately zero chance the server will get screwed, theoretically or otherwise. That's why a service charge is different than a surcharge for complying with local laws.

                                                                                  1. re: alanbarnes

                                                                                    Nope. A tip belongs to the staff, a service charge doesn't. It's at the discretion of the employer to distribute the service charge to the staff. See question 6.
                                                                                    http://www.dir.ca.gov/dlse/faq_tipsan...

                                                                                    1. re: nocharge

                                                                                      I'm not talking about the legal standard, I'm talking about industry practice. Somebody can correct me if I'm wrong, but it's my understanding that autograts are always paid through to the staff.

                                                                                      1. re: alanbarnes

                                                                                        Even when the surcharge goes to the staff, part of it can go to the kitchen staff. That's the point with the "Healthy San Francisco" surcharge.

                                                                                        As for whether service charges alway go to the staff, here is a quote:
                                                                                        "the house keeping...[a large portion] of all large party gratuities"
                                                                                        http://sf.eater.com/archives/2010/04/...

                                                                              3. re: nocharge

                                                                                That's akin to withholding from the tip to cover the sales tax.

                                                                      2. They should just call it a TAX.

                                                                        Because that is what it is.

                                                                        1 Reply
                                                                        1. re: DoobieWah

                                                                          That had been my thought. It's not as if it's discretionary. It's just that some places break it out as a line item and others don't. But it's there regardless.