Toronto restaurant introduces surcharge to cover benefits plan

Starting on Thursday, a Toronto restaurant will add a three per cent surcharge to each bill in order to cover its new employee benefits program.

“We needed to bring in more money to pay for the benefits,” says Heather Mee, co-owner of Emma’s Country Kitchen. “It’s either raising our prices or [the surcharge, and] for us, this was a more honest and transparent way of doing that. . . . If there’s a clear, separate item, we can track it easily. We’re accountable to the fact that it’s not going into our pockets. It’s going only into the benefits program.”

Mee adds that the average diner spends less than $15, so a three per cent surcharge would amount to less than $0.50. If people doesn’t want to contribute, they’re free to opt out.

Read: Starbucks Canada increases mental-health benefits to $5,000

Twelve of the restaurant’s 15 employees are full-time and thus eligible, and the benefits package is set it kick in on June 1. It will include health and dental benefits, including paramedical services such as massage therapy and orthotics, as well as life insurance. The plan will also cover employees’ dependants. While the surcharge is essential to funding the plan, Mee notes it won’t fully cover the expense, so the business will pick up the rest.

“We think that anybody who wants to fund health benefits for their employees is on the right path . . .,” says Marla Schwartz, president of benefits administrator Benecaid. ”Especially in a food service organization, you want to have healthy employees. They’re serving you a meal. Health benefits helps the employee stay healthy, engaged and hopefully helps the tenure of the employee.”

Read: Which industries offer the best benefits?

Mee notes few restaurants offer benefits because profit margins in the industry are “minuscule” and that it can be risky to raise prices. “In a lot of cases, there’s just people doing what the status quo is, doing what everyone’s always done,” she says.
 
“There’s lots of ways to skin the cat,” says Schwartz, noting that smaller restaurants may find health-care spending accounts more affordable than traditional plans.
 
“There’s a catastrophic health insurance cover in there so if they really do get sick, they have something. But if they need massage therapy or physiotherapy, they get to choose how to spend those dollars on their own,” she says.
 
Mee adds it was “a no-brainer” to start a benefits plan, as happy employees are more likely to stay longer. ”The business wouldn’t exist and wouldn’t be successful without the amazing people that help us run it, and rewarding them in any way that we can is worthwhile, always.”
 
 
What do you think about the restaurant’s approach? Is it OK for a company to fund a benefits plan in that way or is it better to just raise prices? Don’t forget to have your say in Benefits Canada‘s weekly poll.
 
As for last week’s poll, it asked whether other provinces should follow Ontario’s lead and implement pharmacare for youth under 25. The results were close: 56 per cent of respondents thought they should because the program makes treatment more widely available and saves plan sponsors money. The other 44 per cent thought the provinces shouldn’t do what Ontario is doing because it won’t deliver the efficiencies of a broader pharmacare program and, given that youth tend to take few medications, it won’t result in significant savings for plan sponsors.