The new cost of dining: Republique owners defend 3% surcharge on ‘O’Reilly Factor’

Restaurateur Bill Chait and chef-owner Walter Manzke of Republique appeared Thursday on Fox News’ “The O’Reilly Factor” to discuss the 3% “Healthy LA” automatic surcharge that it has added to all of its customers’ checks.

The surcharge has stirred controversy with some diners and landed Chait and Manzke in the public eye as small businesses start to address the economic changes that will affect them under the Affordable Care Act.

But Chait’s official statement about the surcharge is that the restaurant was motivated to add the fee to the bill not by Obamacare but in an attempt to balance the inequity between what servers make and what cooks make. With the money from the surcharge, all of its employees would benefit from healthcare. (By law, money from tips can go only to servers.)

Whatever the reasoning for the healthcare fee, it comes down to the same issue that many restaurants are facing, whether they want to offer health benefits to their staff now or, for businesses with more than 50 full-time employees, when they’re required to do so in 2016. It’s safe to assume that the higher costs of doing business will be passed on to diners.

But in what way, shape or form? Is the surcharge the answer?

“I’m still not getting why you just didn’t build it into the price of my chicken Kiev or whatever I’m getting,” host Bill O’Reilly said during the show. “Just give it there.”


Chait responded that it was the most cost-effective way to provide the benefit.

“We used healthcare as the conversation rather than ... additional wages because it was actually a very efficient way, a tax-free way for people to get a benefit because healthcare’s not taxed,” he said. As opposed to revenue and/or wages, presumably. Some restaurateurs have said that menu prices would have to increase significantly more in order to generate what a nominal surcharge does.

Is 60 extra cents on your $20 lunch too much to ask?


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