Opinion: The curse of the 3% healthcare surcharge in restaurants

Some L.A.-area restaurants are charging customers a 3% healthcare fee to provide workers with insurance.


Most of us, as regular or infrequent restaurant patrons, might be willing to pay a fair price for our meals so that the people who provide service to us can enjoy the far more basic service of healthcare. But adding a 3% itemized surcharge to customers’ tabs for employee health insurance, as increasing numbers of Los Angeles-area restaurants have been doing over the past year, is one tone-deaf way to go about it.

Though the surcharge may not be intended this way, there’s a “Hate Obamacare” element to a line on the bill adding the 3% for restaurant workers’ health insurance. “See? All this government interference is costing you more money.”

Even taken the reverse way, that customer and employer are colluding for the good of the worker, the times when we treat ourselves to a meal out aren’t when we most want or need a social message on our restaurant tabs. “See? I am a good restaurant owner who covers employees with health insurance, and you are a good patron for participating, even though I didn’t give you a choice.”

What’s next? An electricity surcharge because the restaurant placed solar on its roof? Will there be so many add-on charges that customers decide they don’t need to add a tip? It’s better to wrap all costs into the basic tab without the extra messages -- especially so that customers know what the tab will look like at the end of the meal, instead of getting the 3% surprise.


But there’s one more reason to look on the surcharge with suspicion: How do you know it all goes toward employee healthcare? Last year, the San Francisco city attorney settled with several dozen restaurants after an investigation by the city found that not all of the surcharge money was going toward employee healthcare. Restaurant owners said it had been unclear that they had to devote the whole sum toward that.

In San Francisco, the discrepancies were discovered because the surcharge was imposed in response to a city rule on employee healthcare, giving the city’s Office of Labor Standards Enforcement the opportunity to look at the books. In Los Angeles and other areas where the surcharge is a private-sector initiative, how would customers know whether they’re paying more to make sure everyone can go to a doctor, or paying even more to provide the restaurant with some additional cash? Restaurants might say it’s for one thing, and certainly the employees would be saying something if they weren’t receiving coverage. But if the surcharge more than covers the health expenses, who’s to know?

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