Toronto eatery adds surcharge for employee benefits, customer reaction mixed

Emma's Country Kitchen recently announced they would include an optional three per cent surcharge on customers' cheques to go toward benefits for full-time workers. (Google)

TORONTO -- Increasingly tight profit margins have restaurant owners seeking creative ways to compensate staff, but one Toronto eatery's small surcharge to help pay for health and dental benefits has customers split.

The owners of Emma's Country Kitchen recently announced they would include an optional three per cent surcharge on customers' cheques to go toward benefits for full-time workers. They argued the fee -- which would amount to less than 50 cents on the average bill -- would be more transparent than raising prices.

"Instead of taking responsibility they are just downloading it to their customers," Karen Hanna wrote on the restaurant's Facebook page, while Jeff Herrle countered, "Wow, truly remarkable commitment to a laudable ideal ... and for this to happen in a time when many employers are contributing to the problem of precarious work under the auspices of 'savings' and 'competitiveness.' Well done!!!"

Server Agnes Ramos, who has worked at the brunch diner since September, is cheering the idea.

"I've been serving since I was 18 and I've never been able to receive benefits so it's a great idea. I totally support it," says the 27-year-old, who ultimately won't be able to take advantage of the plan until she increases her hours from part-time.

Ramos was on her mother's benefits plan until a few years ago.

"Now that I don't receive benefits I'm less likely to go to the dentist or get my eyes checked. I actually just came back from the dentist a month ago and my bill was $400 and it was a bit hard for me to swallow, so it's definitely a great addition and I hope that other people feel the same way about it."

While some customers may gripe about the paying the surcharge, others could see value in a company that provides benefits, says Mike von Massow, a professor in the department of food, agriculture and resource economics at the University of Guelph.

"We care about child labour in other countries. We care about animal welfare. We care about a whole bunch of things, but why might we not patronize a company that provides benefits to their employees?"

In an industry where the average pre-tax profit is 4.3 per cent, absorbing additional labour costs could be difficult for restaurateurs.

But trying to pass those costs to patrons can be risky, says von Massow. It might result in customers nixing an appetizer, dessert or alcoholic beverage, reducing overall revenue for owners, or less tips for staff.

The Nook Creperie in Pembroke, Ont., recently began contributing to benefit plans for full-time staff after employees voted for that compensation over raises, says owner Joanna Els.

She covers 40 per cent of the cost of the benefits package employees choose -- which includes dental, eyewear, prescriptions and life insurance -- and they cover the rest. The benefits also cover massages and a portion of shoe insoles, which Els thought necessary in an industry requiring people be constantly on their feet.

"It's definitely a large cost for everyone involved unfortunately," says Els, who doesn't believe her customers would appreciate paying a special surcharge.

"I think it's necessary and it also gives us a bit of an advantage in an area where it's very hard to find quality staff. And we hope when we invest the time and money into training them that we are going to retain them."

Bill Pratt, owner of Chef Inspired Group of Restaurants and Trucks in Dartmouth, N.S., began paying half the health and dental premiums for his full-time managers and supervisors, who number about 30, in February "because it's the right thing to do" and he wants them to continue working for him.

But he wasn't able to make the move until his fifth year in business.

"In the restaurant game you've got to get through your first three years to see if you're even going to last and it's an expensive burden where you're trying to manage your food costs and your labour costs and your overhead and pay your rent and keep your head above water -- and then pay yourself on top of all that stuff," Pratt says.

"So it's just too much of a burden for a start-up restaurant to take on another cost because it's pretty substantial to set it up."