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L.A. Restaurant Adds Service Charge To Tabs To Pay For Staff Health Insurance
Republique, the new restaurant helmed by chef Walter Manzke on La Brea, is doing something many restaurants don't do: providing health care for their employees. How they're finding the funds is a new one too. They're adding a 3% charge onto diners' tabs to compensate for medical insurance.
Bill Chait—who also owns popular restaurants like Rivera, Sotto, and Petty Cash—thought long and hard before adding the surcharge onto the bill, but ultimately decided it would be worth the criticism—and the restaurant is getting plenty of it on Yelp.
“I would be lying to you if I didn’t tell you this has been an aspiration to solve this issue over the years, so you don’t get ruined by rising health care costs,” said Chait. Under Obamacare, businesses like Republique with more than 50 full-time employees have to offer affordable health care benefits or pay fines. (This week, that mandate was delayed again, to 2016)
Chait got the idea from San Francisco, where in 2011, restaurants in the City collected more than $14 million in health care surcharges. However, the program became controversial because it was discovered that only about a third of the money went towards health care, according to a report by the Office of Labor Standards Enforcement.
He promises his customers that won't be the case at Republique, and that the money will go exactly where it should: to the dedicated service workers that make his restaurant empire a reality.