Restaurant's healthcare surcharge draws strong responses

Republique servers can make as much as $70,000 to $80,000 a year, which is terrific, Manzke said. But it's roughly three times as much as other full-time staff, including cooks and food preppers. Manzke thought that providing health insurance would make lower-end jobs more desirable and reduce turnover, giving him time to move employees up the restaurant ladder.

OK, but why not simply add 3% to the cost of every menu item, or pay kitchen staff higher wages?

Raising operating costs would force higher prices, said Chait, and risk driving away customers. It could also mean higher taxes, and higher rent, too, because the rent is based on monthly revenue.

Chait said they considered charging a flat 17% service fee, following in the footsteps of famed Berkeley restaurateur Alice Waters, who provides healthcare and a 401(k) to employees. But they opted for the surcharge, despite a scandal in San Francisco, where some restaurants that levied healthcare surcharges were found to be pocketing the money rather than paying for medical coverage.

"We will absolutely pay for healthcare," said Chait, who is offering employees three Kaiser options, two that require employee contributions and one that doesn't. And he said he's already looking into offering similar plans to employees of other local restaurants he owns.

I spoke to three Republique employees who were thrilled to have a medical plan in an industry that generally doesn't provide one. Think about that for a moment — do you really want the people handling and serving your food to not have health insurance?

Chait said his restaurant could have done a better job of explaining the surcharge, which is noted at the bottom of the menu. He said staffers are being instructed to tell customers the reasoning behind the fee and to emphasize that they can leave a smaller tip, if they're so obliged.

But Chait was a little surprised that anyone affluent enough to pay for entrees that range from $18 for butternut squash agnolotti to $75 for prime dry-aged cote de boeuf would gripe about paying a tiny fee so the person washing the tricolore salad can have a modest healthcare plan.

I think I'll pass on the cote de boeuf. But otherwise, I'm happy to kick in an extra 25 cents for breakfast or a few bucks for dinner.


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