Restaurants Impose Customer Surcharge for Employee Health Care

Published June 25, 2019

The surcharge is typically between 3 and 4 percent, and although the surcharge is voluntary, customers may have to ask for it to be removed if they don’t want to pay it.

Preference for Government Mandates

Jeff Stier, a senior fellow at the Consumer Choice Center, says proponents of big government prefer not to allow people to decide whether to support others’ health care.

“In my city of New York, Mayor Bill de Blasio is no fan of business or consumers, and he is opposed to this approach,” Stier said. “We shift around the prices and costs of things, and we put it on industry, business, and on health care for employees, and [then we get] minimum wage increases, like $15 an hour in New York, and now other cities are trying to do this,” says Stier.

Stier says he has argued against government policies such as minimum wage increases because they hurt low-margin businesses such as restaurants.

“It’s kind of like squeezing a balloon, especially when we squeeze these low-margin businesses,” Stier said. “The costs are going to have to go somewhere. That’s why this [health care surcharge] is an interesting approach. It’s interesting that many are giving consumers an option whether to pay it or not, as if they’re guilting them into paying for the health care of the workers, but I like innovative solutions and putting them to the test in the marketplace.”

“If people who go to those restaurants are somehow offended by it, being asked optionally to pay more, they don’t have to.” Stier said. “If they feel guilty about having to choose, they can decide not to go to that restaurant anymore. It’s a way of employers trying to do good by their employees, and if consumers don’t like it, they won’t go there and it’s a failed experiment.”

Crisis Mentality

Stier says ideologically driven politicians actually dislike it when people solve problems without government intervention.

“Mayor de Blasio wants to put it on the backs of [the rich], so it’s a way of reallocating resources to pay for health care, even when you’ve got an innovative approach that’s completely voluntary on every side,” Stier said.

“The restaurants don’t have to do this, and diners don’t have to pay for it, but he’s against it because why should people be paying for it when we can get it from the rich, and take away a crisis that’s being used to reallocate resources?” Stier said.

‘It’s Posturing’

John Dale Dunn, M.D., J.D., an emergency physician in Brownwood, Texas, says the restaurant surcharge is a classic example of social-justice posturing.

“It’s a phony-baloney claim that plays well in places like Austin, Texas, where people do things like this all the time,” Dunn said. “Also, it’s only voluntary if it’s your choice to pay. If you have to make a special complaint to have the cost removed, then it’s not voluntary. This could more easily be done by simply raising the price of food to cover their employees’ health insurance. That’s how businesses normally do this, so I think this is just another identity politics issue to create another oppressed group: restaurant workers.

“It’s a joke, it’s posturing, and it’s all part of the socialist canon where everything, all economic activity, is viewed through the lens of the oppressed vs oppressor relationship, and therefore we have to ding them in order to get another 3 percent out of them,” Dunn said. “But I’m here to tell you, it’s not likely 3 percent will be enough to pay for even routine benefits like in the old days before Obamacare came along and made health care too expensive for most people.”

Kenneth Artz ([email protected]writes from Dallas, Texas.