Sick restaurant surcharges you shouldn’t have to pay — or should you?

By | May 20th, 2013

Ward Chartier almost choked on his breakfast croissant he ordered at Oakland International Airport recently.

The reason for his consternation: an item on the bill that he thought he recognized, but hoped he didn’t.

It said, “EmpBen_Srchg” and it came to 12 cents, or about 2 percent of his bill.

“I interpret this to be employee benefit surcharge,” says Chartier, a consultant who lives in San Ramon, Calif. He asked me if I knew anything about the mysterious fee.

I didn’t, so I asked Oakland Airport.

“The Port of Oakland agreed to permit its concessionaires to add a surcharge of up to two percent on guest checks to cover the cost of providing medical benefits to its employees,” Joanne Holloway, an airport spokeswoman, explained. “The businesses are required to post notification of this charge on its menu boards and on the guest receipt.”

Odd items on a restaurant bill aren’t new. In San Francisco, restaurant patrons have faced even higher surcharges on their restaurant bills, which may or may not be used to cover employee healthcare. In Florida, one restaurant chain owner last year imposed a new fee to cover the costs of Obamacare. Oakland’s EmpBen_Srchg was added last May.

But the fee raises a set of bigger questions: Are these extras reasonable? If so, how should they be disclosed? And is there a better way to buy a croissant?

To the last question, Chartier knows the answer. Yes, absolutely. The cost of a pastry should be baked into the price.

“Is this the wave of the future, that we travelers will be nickel-and-dimed by every purveyor along our travel route?” he wonders.

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Fee frenzy

Is a small surcharge on your fast-food bill a reasonable thing? Well, yes and no. It is reasonable for an employer to cover the healthcare costs of employees. But tacking it to a bill without notice is a questionable practice.

Customers don’t really care about the extra costs of doing business, for starters. Even state and local sales taxes are more or less irrelevant to them. All they care about when they’re running to catch a flight is the grand total.

Airport patrons like Chartier anticipate that their bill will be a little higher once you add Oakland’s city tax and California’s sales tax — it adds a total of 9 percent — but in an ideal world, the price they see for that croissant would be the price they actually pay. No surprises.

Add another surcharge or two, and it becomes difficult to estimate the actual price of a meal.

Breaking out healthcare costs as a “surcharge” benefits Oakland Airports’ vendors in an important way: It allows them to quote menu prices that are artificially low — kind of like what airlines did before the Transportation Department ruled that they needed to offer an “all in” fare.

Chartier’s menu didn’t warn about a 2 percent surcharge. It was sprung on him at the cash register, he says.

I know what you’re thinking: what’s the big deal with two percent, anyway? Besides, it’s taking care of sick employees? Don’t you have any compassion?

Of course I do. But what happens when a business decides to break out the cost of rent and insurance as a separate fee, too? You could end up with restaurant bills that look like a car rental invoice. Once you add all the taxes, transportation fees and surcharges, your bill has doubled. (To be fair, most legitimate car rental companies quote a post-surcharge and tax rate. But not all of them.)

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Whose fault is this?

The restaurant business isn’t easy. My grandfather owned and operated a diner in Charlotte for many years, and I grew up hearing stories of long workdays with no weekends. But even my grandfather paid his employees a living wage and refused to play price games with his customers.

The current system, which allows owners to pay restaurant servers substandard wages and then forces workers to rely on tips for survival, seems fundamentally unfair — not just to the workers, but to patrons like Chartier.

Doesn’t it seem wrong to count on our charity to supplement a server’s wages? Shouldn’t a tip be a reward for excellent service instead of something workers depend on?

But the latest surcharge may be a fee too far. Quoting a customer one price but to then add a fee to cover a server’s medical bills makes a restaurant meal look cheaper than it is. And it makes restaurant owners look cheaper than they should be.

Should restaurants charge customers a fee for employee healthcare benefits?

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