MINNEAPOLIS — Supposedly junk costs will be a thing of the past in Minnesota starting January 1.
Those extra costs often show up as health and wellness costs on some restaurants’ bills.
Supporters say the law guarantees price transparency, meaning the price you see on the menu is the price you pay.
“Service fees are not junk. These are dedicated funds that go directly to employees,” said Angie Whitcomb, president and CEO of Hospitality Minnesota.
Whitcomb argues that service fees are transparent to begin with, and says simply raising prices hurts business.
“As consumers we are price conscious, so even though the solution may seem simple: ‘oh, just include it in the reimbursement,'” at some point we as consumers are going to decide that $20 for a meal that makes $15 last year doesn’t longer part of our budget,” said Whitcomb.
“I would like to think that our employees’ health care and their mental well-being is not a mess,” said Brent Frederick, owner of Jester Concepts.
Jester Concepts operates six Twin Cities restaurants: PS Steak, Borough, Parlor, Butcher and the Boar, Char Bar and Starling.
In early January, Frederick said all of its restaurants will eliminate their 5% health and wellness surcharge and replace it with a 3% credit card processing fee, combined with a slight price increase.
Frederick echoed Whitcomb’s claim about just raising prices.
“The reality is that people are so cost-conscious right now,” says Frederick. “They notice when something goes up a dollar or two, and then we get the nice two-star Google reviews.”
Restaurants will still be able to charge a mandatory tip, as long as it is clearly and prominently disclosed.
Frederick said he has tried that in the past, but found the tips to be very unpopular.
Starting in the next legislative session, Whitcomb said Hospitality Minnesota will ask lawmakers for a fix to the law.
Jason Rantala
