Starting Friday, a number of popular Minneapolis restaurants are adding a 3 percent “service charge” to customer’s bills to help pay for the rising cost of health insurance for their employees.
CBS News reports:
Barbette, the Bryant Lake Bowl and the Bird are just a few of Kim Bartmann’s restaurants. She’s adding a 3 percent service charge to customer’s checks to offset the rising cost of healthcare for her employees.
It comes to 60 cents for every $20 spent.
Health and dental benefits have been part of Bartmann’s business for many years.
One of Bartmann’s customers asked the Star Tribune, “Why wouldn’t she just increase her prices and pass the costs along that way? I’m just curious.”
The customer thought it would be awkward for employees to tell their customers that the surcharge on their bill is for healthcare.
The answer is simple.
Bartmann decided to make the charge as an alternative to raising prices on her menu items.
Implementing the surcharge means her restaurants can be honest with customers about what this is all about.
People ask what the surcharge is for, but higher prices on meals don’t raise eyebrows.
Rather than increasing prices, she did something that let people know exactly why her restaurants need to make a change.
Bartmann says health insurance has become less and less affordable for the last few years, increasing “20 to 30 percent a year” in price, and her restaurants can no longer keep up.
Star Tribune reports:
“Just as people are wanting transparency on where their seafood or beef or vegetables come from,” Bartmann said, “we’re hoping that transparency around this issue in our restaurants is appreciated and encourages people to patronize our locations.”
She said she has spoken with many of her employees at the six restaurants, and “I haven’t gotten any negative feedback. I often get thanked [for offering health insurance]. … A lot of restaurants don’t offer insurance.”
Along with Barbette, Red Stag and Bryant Lake Bowl, Bartmann is applying the surcharge at Pat’s Tap, Tiny Diner and The Bird.
“Health insurance has been going up 20 to 30 percent a year for the last few years, and we can’t continue to sustain those increases,” Bartmann said.
Bartmann’s restaurants are the first in Minneapolis to have a surcharge for employee health insurance costs, but certainly not the first in the country.
The Federalist Papers Project reported on one such case at a Texas Buffalo Wild Wings here, and the LA Times, while reporting on their own city’s new surcharges, said of other such incidents in California, “After San Francisco implemented a healthcare mandate in 2008, many restaurants there adopted a surcharge to cover the cost of health insurance for employees.”
So while customers are already paying a great deal of restaurant employee’s wages, they’re now expected to pay for employees’ healthcare as well.
Star Tribune continues:
Bartmann has been offering health care coverage to her employees since 1993. Anyone working 25 or more hours can chose from four plans and also receive dental coverage. Staff members pay 30 percent of the premium, and management picks up the rest.
Bartmann said “it’s probably true” that she is the first restaurant operator in the Twin Cities to create a customer surcharge for employee heath insurance costs.
“I’m probably the first person [in the industry] to try everything,” she said, noting her commitment to being environmentally conscious in how her restaurants operate and in supporting local organic farms through her business decisions.
Bartmann made no mention of Obamacare in her interviews, and tried to keep the mood light.
Of course Bartmann can’t complain. If you expect people to pay the surcharge, in addition to regular tipping, they have to like both you and your eco-friendly, insurance-providing businesses.
There’s obviously good in providing insurance to your employees, but you know something is amiss when you can’t afford it and instead expect your customers to.
And while Bartmann didn’t complain about the ACA during her media interviews, struggling to maintain your businesses, and having to resort to desperate measures because of government mandates for less and less affordable insurance, is nothing to be happy about.
It’s a tragedy.