Published October 22, 2015

Do Healthcare Surcharges Make Customers Balk?

The Affordable Care Act has been changing the way small business owners run their operations, and restaurants are no different. The ACA mandates that all businesses with more than 100 workers provide healthcare for employees who work more than 30 hours a week. Soon, businesses who employ more than 50 people will have to provide healthcare as well. This new expense will cut into restaurants’ already thin margins, and operators are looking for ways to stay solvent.

The obvious solution is to raise prices. However, just rolling all extra costs into food prices may make restaurants seem overpriced and convince customers to stay home. The Rustic Canyon restaurant group in Santa Monica, California has a different idea. Instead of simply raising prices, Rustic Canyon implemented a 3 percent healthcare surcharge on checks at all of its restaurants. The group does this so it won’t be unfairly accused of overpricing their food, and also so customers know more about what expenses the money they pay are covering.

Rustic Canyon says the program is going well, and while some people raised a fuss initially most customers happily pay the fee. However, most of the customer base of the group’s restaurants are neighborhood regulars, and it is unclear if more touristy restaurants will have a hard time convincing customers to pay extra for employee healthcare.

Read the full article here: Are Surcharges the Solution to Pay for Healthcare?

Link: https://www.fsrmagazine.com/human-resources/are-surcharges-solution-pay-healthcare