LA Restaurants Charging 3 Percent to Cover Employee Health Care

Diners at several Los Angeles-area restaurants are paying a new fee on their bill, and it has nothing to do with food or drink.

More than a dozen primarily high-end restaurants are adding a 3 percent surcharge for their workers’ health insurance to the checks of their customers, the Los Angeles Times said.

Restaurant owners say the surcharge isn’t a political statement. Instead, they claim it’s the only way they can provide insurance to their workers while still maintaining profits, according to the Times.

“We want our staff to have health care,” said Josh Loeb, the co-owner of popular dining spots including Milo & Olive and Rustic Canyon. “It’s not because we support Obama or don’t support Obama, or are Democrats or are not Democrats.”

The health insurance surcharge is similar to what many restaurants in San Francisco implemented after the city adopted a health care mandate called “Healthy San Francisco” in 2008. Unfortunately, there’s really no way to tell if all the surcharge money is actually going toward employees’ health care.

According to the San Francisco Chronicle, a city audit of several dozen restaurants in San Francisco “found discrepancies over a two-year period in the amount collected in the surcharges versus how much was put aside for employee health care.” The missing funds amounted to more than $2 million. The Chronicle said:

Of the restaurants participating in the program, 38 paid to make up their shortfalls, while 17 were cleared and two others reached non-monetary settlements, with an assurance that they will comply with the city ordinance. [San Francisco city attorney Dennis] Herrera said 4,000 restaurant workers will be eligible for disbursements.

In San Francisco, it was a public-sector mandate. In L.A., it is a private-sector initiative, so it would be difficult to decipher if the surcharge is actually paying for health care or padding the pockets of restaurants, the Times said.

Patrons’ views of the health care surcharge are mixed. While many people said they don’t mind paying a little extra for their meal to provide for workers’ health care, they don’t want to see the extra fee added to the bottom of their bill. Bruce Morman, an L.A. architect and frequent patron of fine dining, told the Times he’d rather see menu prices increase than the surcharge.

“It should be seamless,” Morman said. “I don’t want to think about it.”

I’m with Morman. If you’re not trying to make a political statement, then just increase your menu prices to pay for health insurance for your employees and call it good.

What do you think of the L.A. restaurants that are assessing a health care surcharge to their patrons’ bills? Share your comments below or on our Facebook page.