More Restaurants Are Adding Healthcare Surcharge to Customers’ Checks

Foreign & Domestic in Austin, Texas Google Street View

Some restaurants in Texas are reportedly adding a new charge to diners’ checks, and it might become a nationwide trend.

Foreign & Domestic, in Austin’s North Loop, and Hoover’s Cooking, in Cherrywood, added a health care surcharge to checks to cover the cost of sick leave and health insurance, Fox News reported.

Foreign & Domestic added a 3 percent charge to each bill. Patrons can deny the charge, but its co-owner, Sarah Heard, said many opt not to.

Heard told Fox News, “Since January 1 we have had less than five guests ask to have the fee removed.”

Nathan Lemley, the other co-owner, told KVUE that Foreign & Domestic chose to charge more rather than raise the price of food.

“We also started applying a three-percent surcharge on customer bills. If they would like, we can remove it,” said Lemley.

“If we were to raise prices on our food, we would have to raise a dollar per item. Basically, this would be the least amount we could raise and that would actually cost the guest more,” he explained.

Hoover’s Cooking implemented a $1 “community value contribution,” according to Fox.

“Just as we value you as a patron, we want to do right by our team of cooks, servers and support staff. An extra dollar might not seem like a lot, but added to your bill, you’re helping provide Paid Time Off [PTO] for each and every employee at Hoover’s Cooking,” said a note from Hoover’s.

“The extra portion of comfort and security PTO brings means that the staffer is healthier, happier, and they enjoy working at Hoover’s because our patrons show they care,” it continued.

Other restaurants across the United States have adopted similar measures. For example, a restaurant owner in Santa Monica, California, also adds the additional fee.

“If anybody has a real issue with the surcharge—for whatever reason—and they don’t want to pay it, we don’t question it. We just tell them we’ll take it off,” Josh Loeb, the California restaurateur, told FSR Magazine in 2015. “I’d say that happens maybe once every couple of weeks in our restaurants.”

According to Fox, several restaurants in the Minneapolis area are now charging extra for “health and wellness charges,” and several Chicago-area restaurants have done the same.

In San Francisco, diners at some restaurants have to pay an “SF Mandates” or “Healthy SF” charge following a citywide ordinance, reported the San Francisco Chronicle in 2018.

But not everyone agrees with the move.

Ryan Sutton, in an opinion article for Eater.com, said that restaurants shouldn’t “be allowed to add surcharges.”

“If adding a few percentage points to dinner doesn’t seem like that big of a deal — five percent works out to six bucks on a $120 bill — remember that restaurant bills are already contain[ing] at least one more ‘extra’ than at a typical retail establishment,” said Sutton’s op/ed piece.

Sutton noted that there are a number of fees.

“Of course there’s the standard sales tax, levied on most transactions in the city, followed by the optional gratuity line, which is unique to bars and restaurants. Add on the extra surcharge and you’ll be at three discrete supplemental charges at your local cafe. A taste of this ridiculousness is already fully apparent to anyone who has ordered delivery from Caviar, which levies a service fee, permits delivery fees, and adds an optional line for courier bonus,” says his article.

“There’s something particularly disingenuous about mandating a restaurant surcharge while keeping the tip as the only optional fee in a restaurant transaction, considering that the tip constitutes the bulk of a waiter’s compensation,” he opined.