The San Francisco Restaurant Health Surcharge - It's Confusing

You might have noticed it on your restaurant bill, and maybe not at another place you visited... it's that 2-5% fee tacked-on to your meal. Restaurants call it a "health fee," others call it a "health surcharge" and others call it a "health tax."

It's really confusing, ain't it?

Since the City and County of San Francisco requires all employees to have some form of health insurance, some city restaurants decided to get all whiny about it by charging a percentage surcharge to every bill. Others have decided to obey the law by not offering a percentage surcharge and may simply just absorb that cost or just revise the prices on their menus.

Today, I'm going to target those pesky restaurants who sneak in that little surcharge.

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Here's the rules I do understand if a restaurant wants to do a health fee/surcharge/tax:

1. It must be clearly noted on every single restaurant menu (even if it's in small print). That's called informed consent; you have a right to know of any additional surcharges being tacked on, other than the sales tax. This is similar to the 18% gratuity charge for parties larger than 6 people and must be clearly noted on the menu.
   
2. The restaurant must clearly note this charge on their receipts.

Here's what I don't understand:

1. Can it legally be called a "tax" on the receipts and/or menu? For the consumer, it's pointless which phrase/word(s) used because you pay the same. But in a legal standpoint, it can be risky to call it a "tax" as it is only used for a government collection purpose.
2. How is the health percentage charge applied? Here's three possible examples of potential problems: (1) Using the subtotal, calculate the health percentage and the sales tax separately; add them together for the grand total. (2) Using the subtotal, calculate the health percentage, add the two together, and calculate the sales tax. (3) Using the subtotal, calculate the sales tax, add the two together, and using the new total, calculate the health percentage.

To understand the difference between taxes and surcharge/fee, here's a great example:

• California State University students pay "fees" but not "tuition" since California residents get their education tuition-free; legally, CSU campuses cannot use the word "tuition" unless the student is not a legal resident of California.

Here's an example of a restaurant that calls their health percentage charge a "tax:"

• McCormick and Schmicks in San Francisco charged my gift card a "SF Health Tax" of 62 cents, and this was calculated by using the subtotal of my food and beverage cost (pre-sales tax) and adding 3.5%. The sales tax was calculated using the food and beverage total (not including the health percentage charge) at 9.5%.

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I don't like these health percentage charges. It pisses me off when I'm being charged extra when I get my bill and they could have easily sneaked it into their menu by just charging a couple of dimes to the prices (or using cheaper ingredients). It's like the airlines advertising great fares, but not including the $20-$35 fees until you start booking it online.

Legal note: I am not a lawyer or attorney. This is not legal advice. Consult with a lawyer, city attorney, district attorney, or someone with a law degree for help. I may sound like some kind of lawyer, but I'm not one... I'm an Administrative Assistant.

Would you pay $1 for Water at a SF Restaurant?

It's the big $50,000, I meant $1 question... would you pay a restaurant $1 for a glass of water?

Maybe if you ate at the Millennium restaurant in San Francisco.

Michael Bauer of the SF Chronicle reports this particular restaurant charges a $1 fee for their water which is always free at any other San Francisco institution.

The restaurant claims they use a filtration system from the city's tap water line as a cost cutting measure due to the high priced of bottled water. They also mention that they do this surcharge because of the new San Francisco health plan law that requires employers to provide basic health coverage.

But really... FILTERED WATER? Is the restaurant owner just a total idiot? It is pointless to purchase a water filter for water in San Francisco. The Hetch Hetchy provides the best drinking water in the entire nation, and a local news station did a blind taste test with chilled water and people felt the municipal water tasted better than bottled.

Plus... tap water costs literally pennies a glass and the restaurant is literally taking a 700 to 1,000% markup on their "filtered water." What if I wanted non-filtered water? Would they still tack on the $1 surcharge? The answer from management: Either pay $1 for the filtered stuff or get NOTHING.

What a bunch of assholes!

You go to any restaurant and ask for water with your meal. No $1 surcharge there! Will people even eat at Millennium's? It's like going on an airplane and getting all the surcharges tacked on.

What is this? Some kind of frickin protest thought-up by the Golden Gate Restaurant Association against the San Francisco health plan law? You don't charge MONEY for TAP WATER! Filter my ass.

If a restaurant is financially hurting from the health plan policy, then there are two options:

1. Raise the menu prices by 50 cents (assuming that a patron orders two menu items).
2. GET OUT OF SAN FRANCISCO.

What's next A CORKAGE FEE FOR BOTTLED WATER?

Restaurants and San Francisco Universal Healthcare

I really think the City and County of San Francisco needs to keep the "universal healthcare" plan, as paying for medical insurance can at least be about $150 to $250 a month for most healthy adults through an HMO program.

Most employees who work in grocery stores, or just gain a simple wage without any benefits really need something to maintain their health. How would you like the fact that if someone was sick and contagious, and could not go to the doctor or SF General Hospital, would you eat the food at the restaurant?

And we look at the Golden Gate Restaurant Association protesting this universal healthcare idea! They claim it will ruin businesses and many will fold due to this. With the money that the OWNERS (not employees) make, the owners can sure pay for their own health insurance, but does not want to give the hourly employees who is the backbone of the establishment basic healthcare needs. Like I just mentioned earlier, would you like some TB or Influenza in your dinner tonight?

So here's how some restaurants are trying to protest it: They put right on their menu that they will add an additional 15% surcharge to the bill. Sure, the association is pissed off and wants to protest this way, but how about the customers that go in there? I feel if they look at this notice, they would get right out of their chair at the establishment and walk across the street to the fast food joint serving the same fried chicken you were going to pay 15% more (and possibly an extra 5 bucks for the "special" "free range" shit).

Instead of moaning and groaning, and putting it to a lawsuit with expensive lawyers (which I assume the association members share the cost, thus each restaurant spends even more expenses), just do it the easy way!

Here's my solution: Just raise the price of the meals to cover the healthcare coverage the City of San Francisco requires. 15% added to a $7 meal is only $8.05.

OR WHY NOT JUST MAKE THE RESTAURANT ASSOCIATION DO A GROUP MEDICAL INSURANCE PLAN? Hell, many large corporations and government agencies do this! You might get a cheaper rate than the 15%.

The other alternative to not being ripped off is: Go eat and shop in Daly City! They don't require the insurance rule, and their sales tax rate is 0.25% less than San Francisco's 8.5%. PLUS, YOU CAN GET PLASTIC BAGS AND STYROFOAM TAKE OUT BOXES! (Thanks Supervisor Ross for a odd balled law, where I can still get styrofoam and plastic bags at my local San Francisco "Smart & Final."