Restaurant charges customers 5% ‘Employee Health’ fee, sparking outrage on TikTok

A woman’s viral video of a surprise charge on her restaurant bill has sparked a debate on social media about whether customers should shoulder the financial burden of staff health care.

On Jan. 10, TikTok user @ashnichole_xo, also known as Ashley Nichole, shared a story about a recent trip she took to a restaurant she frequents in Southern California.

While paying a bill at Osteria La Buca, an Italian restaurant in Sherman Oaks, California, Nichole noticed a charge on her restaurant bill that she didn’t recognize.

“The weirdest thing that happened to me just happened to me,” says Nichole in her TikTok, which has been viewed nearly a million times. She explains that during a rainy day in Los Angeles, she decided to have dinner with a friend.

“We go to one of my favorite restaurants, this is Osteria La Buca,” she says, adding that she’s been there several times. “We enjoy our meal, we get the check, we pay for our check, and as we sign the tip and everything, we notice something.”

The video then cuts to a photo of her receipt, which shows Nichole and her friend dining on short rib ravioli, steak, and more.

“If you notice at the bottom of this, there is a $4.75 bill for employee health. See that?” she asks her audience. “A 5% surcharge for employee health.”

“The first thought is, ‘What is employee health? What does that mean?’” she says. After working through a few conjectures with her friend at the table before getting ready to leave, she decides to ask the restaurant what the charge entails.

“As we walk out, I go up to the hostess and I’m like, ‘Hey, quick question, just curious,'” Nichole says, adding that she drew the hostesses’ attention to the 5% fee on the total amount of the account. (At first, Nichole thought the restaurant was charging them $5 each, but has since corrected itself in a follow-up video.)

“And she’s like, ‘Oh, that’s our health care,'” she says before pausing to look questioningly at the camera. “And my response was, ‘Your health? Your health care?’ and she says, ‘Yes, our health care.’”

Nichole says she’s never heard of a charge like this and asks her followers whether or not they’ve experienced such charges at other restaurants.

“I had to figure out: Is that normal? Have I been living under a rock and is this normal or is this weird? Because I’ve never experienced this before and this feels weird. But maybe this is normal elsewhere. Let me know because I’ve never seen this before.

TODAY.com contacted both Nichole and Osteria La Buca; neither responded to a request for comment.

The comments section of Nichole’s video shows the spectrum of opinions on the idea of ​​an employee health supplement, with comments ranging from outrage to disbelief.

“Wait! What? How is it the customer’s responsibility to [pay] for their healthcare,” one user wrote on TikTok.

“If I’m paying for their health care, I’m not leaving a tip!” replied another user. “That would be like tipping my child for a service! If I pay your healthcare costs, we are family!”

“I’m sorry, but I’m not paying for this. Just tax and tip,” another person wrote. “The care must be a cover [sic] by employer. These fees are getting out of hand.”

“If I pay for someone’s health, can I now claim them as a dependent on my taxes, right?!?” another person responded with a crying emoji.

While most of the comments below Nichole’s video mock the surcharge, there are some who, if not outright support it, appreciate the restaurant’s transparency.

“Some small businesses in Atlanta are doing this!” noted one TikTok user. “It enables their employees to get health care for themselves and their families and sick leave.”

“The cost can be added to your menu items and you would never know or care,” another commenter noted.

When did these restaurant fees start?

According to a 2020 New York Times article, these types of benefits started popping up in 2008, when a regulation in San Francisco required businesses with more than 20 employees to set aside money for health care. The federal Affordable Care Act, which came two years later, only requires employers with 50 or more employees to do so, often excluding smaller businesses, such as restaurants.

According to a 2022 survey by the U.S. Bureau of Labor Statistics, only 30% of private sector workers in “lodging and food services” have access to employer-sponsored health care.

Rather than being folded into menu prices with customers none the wiser, in recent years these fees sometimes appear transparently on receipts as a “4% surcharge” to combat inflation or “COVID-19 surcharges.” So there is still a lot of confusion about these fees, but some entrepreneurs have tried to explain it.

“The last two years have been tough in the hospitality industry,” Troy Reding, president of Minnesota-based Ally Restaurants, told TODAY.com in July 2022 about a “wellness allowance” he instituted in 2019 at his eateries.

Reding’s “wellness fee” is a 3% surcharge on customer accounts that he puts toward his employees’ insurance premiums, paid time off, access to mental health care, and IRA contributions. According to Reding, he has faced opposition from some clients, but not all.

“I think if you’re using compensation for a specific reason and it’s for the benefit of your employees, that’s the differentiator,” he said.

Restaurant charges customers 5% ‘Employee Health’ fee, sparking outrage on TikTok

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