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Florida restaurant chain adds healthcare surcharge to the tab; will others follow?

A chain of restaurants in central and northern Florida have added a 1% surcharge to its customers’ checks to cover healthcare costs for its employees.

Eight Gator’s Dockside restaurants have instituted the surcharge, the Associated Press reported. Customers’ bills show a fee labeled “ACA,” which stands for the Affordable Care Act that will require all businesses with 50 or more full-time workers to provide health coverage or pay a fine. For restaurants with more than 100 full-time staff members, the deadline to comply is 2015. (Businesses with 50 to 100 employees have until 2016.)

Los Angeles restaurant Republique, which opened last year on La Brea Avenue, instituted a 3% healthcare surcharge, stirring controversy among some diners and landing owners Bill Chait and Walter Manzke in the public eye. The pair recently appeared on Fox News’ “The O’Reilly Factor” to defend the surcharge. “The genesis of this was really a way to give something to the kitchen to show appreciation for their services,” Chait said, because tips can be distributed only to servers, but all employees can benefit from the healthcare surcharge.

At Gator’s Dockside, a sign on the front door and a plastic-coated letter handed to diners along with the menu explain the fee. The AP quoted from the letter: "The costs associated with ACA compliance could ultimately close our doors."

"Therefore," the notice said, "instead of raising prices on our products to generate the additional revenue needed to cover the cost of ACA compliance, Gator's Dockside has implemented a 1% surcharge on all food and beverage purchases only."

"We didn't do this for any, any, any, any, any political reasons," a company official who asked not to be named told the AP. "It was done in all the greatest intentions. It was done to give everybody full healthcare without knocking their hours down and not charging ridiculous amounts of money to do it."

Chait has said that Republique’s 3% surcharge has nothing to do with Obamacare. But many restaurants, which historically operate with thin profit margins, will have to address the issue of the healthcare mandate.

The AP story noted that a $14.56 lunch tab for Asian salad and iced tea at Gator’s Dockside in Clermont, Fla., included a 13-cent ACA surcharge.

Diners’ reactions to the Gator’s Dockside surcharge was mixed, with one customer saying, “People gotta do what they gotta do to obey the law,” the AP quoted. Others said they would tip less.

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Copyright © 2014, Los Angeles Times
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