Rustic Canyon, Mélisse add employee benefit surcharge

WILSHIRE BLVD — Santa Monica restaurant groups are supplementing healthcare costs for their workers by adding a 3 percent surcharge to every bill.
Josh Loeb and Zoe Nathan, part owners of Rustic Canyon, Milo and Olive, Huckleberry Cafe, and Sweet Rose Creamery, along with Josiah Citrin, chef and co-owner of M√©lisse, started adding the surcharge to diner’s bills on Sept. 1. They started enrolling employees — those who work 30 or more hours per week — in the benefit program on Thursday. Healthcare coverage kicks in on Oct. 1.
The Hungry Cat, which has a location in Santa Monica Canyon, will be including the surcharge. Several other non-Santa Monica restaurateurs in the region implemented the program as well.
Loeb said that they recently learned that under the Affordable Care Act they won’t be required to offer healthcare coverage at some of their restaurants until 2016 and that others would be exempt altogether.
“It looked like we weren’t going to have to do it but we looked at each other and said, this is something we want to do,” he said. “We want to be able to grow up as a restaurant. The well-being of our staff is an incredibly important thing for us.”
In San Francisco, many restaurants are already offering health insurance. Republique, in Los Angeles, enacted a 3 percent surcharge when it opened last year.
Republique’s model drew some ire from restaurant-goers who felt they were unfairly being asked to pick up the owners’ healthcare tab.
Some restaurants seeking to add healthcare for employees have opted to instead raise the rates of their dishes.
Loeb noted that either way, the healthcare costs would be impacting the bill.
“We like the idea of a 3 percent model as opposed to just kind of putting it in the menu cost because we actually like the transparency of it,” he said. “We did the math at all of our restaurants. Milo and Olive has a little bit of an overage we have to cover but for the most part it pretty much works out.”
Regulations prohibit the tipping pool from be distributed among all workers, he said, but the surcharge can cover benefits for the wait staff and the line cooks alike. Most of the owners who are in on the surcharge have worked as chefs at one point or another, Loeb said, so they’re familiar with the disparity.
“It gives the customer a chance to adjust their contribution if they want to,” Loeb said. “If a guest were normally going to leave 18 percent and they know there’s a 3 percent surcharge, they can leave 15 percent.”
Loeb sent out an e-mail about the surcharge to all their newsletter subscribers. They’ve posted information about it on the menu and around the cash registers in the restaurants. Servers are making a point to mention it to guests.
“We had a very small response, in general, either way,” he said. “Most of the response is very positive. We get a lot supportive e-mails back from our newsletter. A lot of regulars at our restaurants think it’s great. Some people are going to complain about anything.”
Some people have said they don’t want to see the surcharge — that they’d rather it be included in the menu price. Between the drought and the cost of gasoline, which in turn impact the cost of ingredients, Loeb said, restaurants are already battling to keep the menu prices down.
“I’m finding more people than not appreciate the transparency,” Loeb said. “People want to see an open kitchen when they come to a restaurant. People want to watch restaurant shows where they see what’s going on. We’re saying, let us show you.”

dave@www.smdp.com