More restaurants embrace trend of putting health care surcharges on diners' checks

A few restaurants in Austin, Texas, are the latest to ask diners to chip in a little extra for the sake of their employees’ health and well-being.

Foreign & Domestic, in Austin’s North Loop, and Hoover’s Cooking, in Cherrywood, have recently added surcharges to patrons’ checks to help cover the cost of health insurance and paid sick leave, respectively.

Foreign & Domestic’s optional 3 percent surcharge was added to each bill after co-owners Sarah Heard and Nathan Lemley started providing “great” health insurance for employees as of Jan. 1, but patrons can request to decline the charge — though Heard told Fox News that most diners haven’t.


“Our guests have mostly been not only accepting, but excited about the practice,” Heard told Fox News. “Since January 1 we have had less than five guests ask to have the fee removed.”

Lemley further told KVUE that Foreign & Domestic chose to institute the surcharge rather than raise the prices of food, which he said would “actually cost the guest more” than 3 percent.

Hoover’s Cooking, meanwhile, institutes a mandatory $1 “community value contribution,” the details of which are outlined in a note from owner Hoover Alexander, which is provided with menus.

“Just as we value you as a patron, we want to do right by our team of cooks, servers and support staff. An extra dollar might not seem like a lot, but added to your bill, you’re helping provide Paid Time Off [PTO] for each and every employee at Hoover’s Cooking,” the note reads in part.

“The extra portion of comfort and security PTO brings means that the staffer is healthier, happier, and they enjoy working at Hoover’s because our patrons show they care,” Alexander added.


Though relatively new in Austin, however, the idea of a surcharge to pay for health care costs incurred by employees is not unheard of in major U.S. cities.

Earlier this year, the owners of Fat Rice in Chicago instituted a 4 percent surcharge to cover costs including employee health care, according to the Chicago Tribune. Another nearby restaurant, Daisies, added a 2 percent surcharge in 2017, CBS Chicago reported.

As of October 2018, two sets of restaurant owners the Minneapolis area, who oversee a total of at least 11 restaurants, had instituted “health and wellness charges” to help offset the cost of employees’ health plans, according to WFMY.

Diners in San Francisco, however, might be the most familiar with the concept, as many restaurants have included an “SF Mandates” or “Healthy SF” charge to checks, following an ordinance that requires employers of businesses with at least 20 employees to set aside money for health insurance, paid sick time or parental leave, as detailed in a 2018 San Francisco Chronicle article.

Over in Austin, Heard claims the law is on the restaurateurs’ side, too, telling Fox News that Foreign & Domestic has received the go-ahead from the attorney general, via the Texas Restaurant Association.

In Foreign and Domestic’s case, Heard specified that the restaurant is using the funds from the surcharge toward 50 percent of employees’ health insurance premium, with the employee covering the other half. Many have opted in, though it’s not mandatory, she said.


And while only a handful of the restaurant’s diners have complained, Heard said the practice still has its critics — although most of them never come through the dining room.

“We have received the most negative feedback from sources who have never dined with us, may not understand how small we are, [and] are generally unaware of how the [restaurant] industry works.”