Greedy Restauranteurs and Their “3%” F-You to Customers

There we were, receiving our check for a lovely breakfast at the Barefoot Bar at the Paradise Point Resort in the Mission Bay district of San Diego. The total met my expectations given what we had ordered, and the venue had already added an 18% gratuity for our server even though we were only a party of four. I usually go 20%, but Ok. But then, I noticed that “something extra” that has been greeting me far too often these days on restaurant tabs, and it’s a trend I find all too disturbing.  An extra 3% charge had been added for “California Minimum Wage Fee.” I’ve seen other bills, closer to home in Santa Monica at popular restaurants like Milo Olive (right up the street from our house), add the same 3% for “Employee Healthcare Surcharge.”

As someone who ALWAYS votes in favor of higher minimum or living wages, and who supports quality, affordable healthcare for all Americans, I am not upset that I may have to pay a little more for the food I eat out in order for restauranteurs to make the margins of profit they deem “necessary” to run a successful business.

I DO, however, take umbrage with how they have decided to “advertise” these passed through costs to the public. Instead of simply adding .02 cents to every omelet, waffle, side of bacon, or $2.00 to every nice cut of steak, some restauranteurs are adding these “penalties” in plain view – as a separate line item that amounts to nothing but a giant “Fuck You” to progressive-minded voters and legislators who care about creating a little more income equality and health care coverage in the world for people who wear nametags for a living. Heaven forbid!! Think about it – how can adding this fee (small as it was), instead of simply handing me a menu with only slightly higher priced items (that I wouldn’t have noticed in the two years since I was at Paradise Point for another family event) be considered anything other than a slap in the face? It is a giant resentment on the part of ideological restauranteurs laid out with a very specific purpose: Hey Mr. Customer – you better think twice before supporting public policy that is pro worker.

It is my personal belief that this very wealthy resort (an assumption based on the fact that they’ve been going strong since 1962), and the successful L.A. restaurants that choose to administer the same fee, should be able to cover the new minimum wage and some health care coverage for their employees, either by small increases in prices or by – heaven forbid – making fewer profits. Therefore, it has been my habit (and that of several friends with whom I’ve commiserated on this issue) to protest the charges and very politely explain why. It usually goes a little something like this:

“Excuse me, (server name, which I’m always good about using): “I’m sorry, but I just really feel your employer should be able to support a higher minimum wage / health coverage, and therefore would you mind taking off this additional 3 percent?” I usually also ask (knowing full well the answer is “No,”) “you don’t see any of that 3% back to you personally, do you?” This exercise essentially serves as my #resistance / response back to the restauranteur. And, usually the understanding server acknowledges that they don’t take it personally, and sometimes even wink or whisper to us that they agree.… but not at the Paradise Point Resort. So it saddened me to experience the following two exchanges, one with our server, Lindsay, and the other, with her manager, whose name I did not catch.  They went something like this:

TODD: “Lindsay, hi, when you get a minute, can I ask you to remove this 3% charge for ‘minimum wage.’ It’s nothing personal and won’t affect our tip, it’s just that I feel the resort should – (interrupted)”

LINDSAY, our Server: “Well I can’t just remove that!”

TODD: “Why not?  I can assure you that we’ll still tip you on the full cost of the meal, but this is an arbitrary fee – (interrupted)”

LINDSAY: “Well, this is why I always vote against those higher minimum wages. Because I know it’s going to cause conflicts like this. I mean, I can’t just ‘take it off of there!’”


LINDSAY: (a bit exasperated with me) “I’ll just get my manager.”

PAUSE … For about 5-7 minutes, during none of which I see Lindsay return (at peak brunch) to serve her other tables. Management is CLEARLY not eager to resolve this…

MANAGER: “Did you have a question sir?”

TODD: “No, I was just requesting that Lindsay remove this 3% fee, which is really just your management arbitrarily charging more money – (interrupted)”

MANAGER: “You can’t just have that removed sir!”

TODD: “Well, it isn’t the amount that bothers me – that’s minimal. It’s the principal of the thing. It’s really just your management – (interrupted, with head shaking “NO!”)”

MANAGER: “That’s not very fair to her to ask us to do that!”

TODD: “Who? Lindsay?  Does any of this money go to her?!” (me, getting a little more defiant)

MANAGER: (certainly not admitting that it doesn’t) “It’s state law!  You can’t just take money away from her!”

TODD: “Excuse me (pissed) I’m not taking money from HER. I’ve giving her a full tip, whereas you guys built in only 18 percent!  It’s NOT state law to add this 3%. That’s a decision your management made to slap those of us that voted for higher wages in the face. They could have just minimally raise prices. So I’m simply — ”

MANAGER: “It’s state law, sir! … but, if you feel that strongly about it, I guess I’ll go so what I can do about a ‘special discount.’”

I’ll spare you my futile explanation about it not being a “special discount.” Clearly, he didn’t get what I was trying to do, so I just paid it and wished him well. But the two more worrisome parts of this exchange, as far as I’m concerned, were the following:

  • A minimum wage (+ tips) worker has been conditioned by someone, the management above her, or someone or something in her experience, to vote against her own self-interest and what she deserves to be paid, just to, as she sees it, “avoid conflict.”
  • A manager, who it’s worth noting was not in a suit but also a uniformed worker (chef’s garb, slightly stained), who had been given the impression that not only was this fee somehow going to DIRECTLY help his staff person, but that – maybe – he also misunderstood that the state law was for a higher minimum wage itself, and NOT the fee! I am really not sure that he understood the difference, though I hope he did, and just didn’t communicate it well.

Some of you may have already been presented with something familiar to the awkward controversy that presented itself to me here. Others of you may not have noticed this growing trend and are simply paying the total presented to you.

I encourage you all to protest these fees, however small they seem, as one thing is abundantly clear: We as citizen-activists must go beyond supporting higher minimum wages, living wages, and quality healthcare for working class people at the ballot box. Our actions have to extend now to the billing portion of our meal, where a strong message needs to be sent back to the greedy restauranteurs who want to punish those of us that vote to raise, or elect representatives who pass bills to raise, their worker’s wages and conditions when they refuse to do so themselves.


  1. I have to weigh in here as perhaps one of your only friends who is on the other side of this as a restaurant owner. I assure you we are not all greedy and lining our pockets, we are trying to stay afloat in a business that in the last 6 months has taken a very serious hit (about 30% in the last half of last year from what we and our other colleagues have experienced) That being said, I am not a big supporter of the “added fee” to a restaurant bill. I have been to places, like Republique, where it is clearly stated on the menu and offers that you can adjust your tip accordingly. This 3% for them is a guarantee that every worker there has health insurance. If you work there, you go in knowing that and knowing that is their policy. I wish we could provide that for all of our employees as well, but we simply can’t. When minimum wage goes up, we raise our prices. But, we would not be able to raise our prices enough to cover insurance for all our employees unless the insurance system in our country undergoes a pretty big overhaul. The real problem I have with your story, is that they added a tip and a fee for a party of 4! WTF? And the manager saying that it is “State Law”. Yes, it is state law to pay your employees the minimum wage. It is not state law to add a fee to your check to cover it. Ridiculous. I bet most people don’t notice, since resorts always have so many “fees” that you end up paying. Was there any notice on the menu about the fee? My other problem with fees added to your check, or a “service fee” that some restaurants add (trying to do away with tipping) is that there is no guarantee that your server is going to see any or all of that money. Those fees are not regulated at all! Several big chefs have been sued for that very thing. The owner can simply take them and distribute them as they see fit. I think that is wrong and completely unethical. You will not see a service fee at our place unless you book a large party and a gratuity amount is agreed on before hand. Even then, our employees receive that money that night, not at some later date or on a check where some has been skimmed off the top. That’s my 2 cents about added fees.

  2. As someone who works with the restaurant industry, I have to say the challenge with minimum wage hike is that in California, it doesn’t take into account that servers get tips and back of the house do not. It is quite difficult for many restaurants (some make a good living, while others do not), is that when there is a price hike on their menu people will complain or not come back. For many, it is a psychological thing and many restaurants may think the 3% add on isn’t as big a deal for most customers. Maybe some think of it in terms of a political move, but I don’t think all do. In the situation you desribed above, they handled it quite poorly all the way around. I agree with Stephanie. But I’m not sure what the right answer is for everyone to make a decent wage. There are a few restaurants a few years ago that tried to take away the tip system and just increase menu prices to give health care to ALL employees. That hasn’t worked in most of the restaurants that did this and they had to take it away.

  3. From my January 11, 2016 column on this point
    “City Staff recommends requiring that service charge proceeds go to workers who participate directly or indirectly in the chain of service; including back of house workers (i.e. in the kitchen) in the restaurant industry. At the same time, City Staff proposes that employers can continue their practice of adding other surcharges, such as for health care.

    There is a bait and switch/lack of truth in the advertising aspect to these surcharges when they are not presented up front. There is also something inappropriate about insinuating that health care costs are an “extra,” somehow separate from other operating costs.

    Despite concerns about sticker shock from local businesses, it is the consumer’s right to be informed of all costs up front before deciding upon a purchase, and to be clear where the money is going. For this reason, I would accept this political compromise for today, but vote to phase it out over a period of years and require rigorous reporting to employees and consumers in the interim. But since I’m not on the City Council, even if they don’t make this improvement, I would still support the ordinance for the greater good.”

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