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Restaurant Charges 3% ‘Employee Benefits’ Fee

Business

A waiter prepares a bill to be taken to a table | Image by Monkey Business Images/Shutterstock

A Dallas restaurant owner has sparked debate after implementing an automatic 3% charge on guests’ bills on New Year’s Eve to help fund an employee benefit plan.

“It’s a noble idea that they’re pursuing through ignoble tactics,” said user Dennis Behrman in a Google review for the restaurant, Rye, leaving a 1-star rating. “Fund the benefits program with an upfront and transparent price increase. Tacking a fee onto the tab is deceptive.”

Another user said they would adjust their future tips in response to the practice.

“I used to tip 20%. With your move for the customer to pay for your employees’ benefits, I will now tip 15%,” said Greg Minier, who left a 1-star Google review.

Tanner Agar, who also owns the Apothecary bar on Lower Greenville Avenue, said he was not surprised by the negative feedback, according to The Dallas Morning News. He was prepared for it when he implemented the new employee benefits plan that includes health insurance and paid time off for the restaurant’s 20 full-time workers.

He says he is shocked that people have stated the charge is not transparent enough and hidden, even though it is itemized on every check. Furthermore, the menu includes a QR code that takes customers to a page that explains the charge, he told The Dallas Morning News.

“We’ve told anyone who wants to opt out that they can,” Agar said in an interview.

He said the people who have expressed hate for the program “aren’t even eating at Rye.”

“So, we look at this and say, ‘Did we do this wrong?'” he explained, then promptly answered his own question, “I would say ‘no’ because the people who eat at Rye seem to like it.”

Regular customers have offered Agar positive feedback on the benefits plan. He also said other restaurant owners had asked him how his new plan works as they potentially prep to unveil similar benefits programs.

“We’re trying to do something new and make a change in this industry,” he said. “How are we supposed to serve you at the highest level if we’re burned out, sick, and miserable?”

One Google reviewer argued that servers now have less incentive to provide good service.

“I am afraid it will only discourage people from leaving tips above [the] automatically included 3%,” read the review by Eric Gasanov, “which eventually only disadvantages decent servants [sic] and will not stimulate mediocre ones to work better.”

While the decision might be new for Rye and Apothecary, it is not a new practice in the restaurant industry. Agar said funding employee benefits through customer sales is commonplace in business.

A National Restaurant Association survey of 4,200 establishments published in August 2022 found that 16% already had surcharges.

“If you buy anything from any corporation that provides benefits, you paid for those benefits,” Agar said. “So it doesn’t make sense to me to say it is not your responsibility [as the customer] to pay for those benefits when you help pay for them for everybody else except [restaurant workers].”

Agar said he believes this is the future of the restaurant industry and that restaurants will be able to attract and retain workers with more programs like this.

“The people who get it get it,” he said. “In fact, I feel only more resolute in my decision when I see how many people don’t get it or don’t think we deserve it.”

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16 days ago

Why don’t you do a related story on all of the restaurants that are charging an additional fee when customers pay by credit card? Customers can tell you which establishments are doing this, allowing you to publish a “list of shame” which clearly identifies restaurants charging this fee so that people can avoid dining there. I for one am refusing to pay the fee when I encounter it and am advising every single one that they have lost a customer.