Cafe charging "minimum wage fee" to "offset state increase of minimum wage for tipped employees"

A reader sent Bluestem the photograph of a tab from a restaurant in the east metro, to which a "minimum wage fee" of thirty-five cents has been tacked on to a fifteen dollar tab.

Update 2 8/5/2014:  More on the backstory of this tale in our latest, Stillwater cafe charging "minimum wage fee" was part of failed industry effort for "tip credit." It's fascinating to watch the right now try to spin this failed lobbying into the notion that people "don't want to pay" for increased costs.  What nonsense--it's the pettiness of the public relations stunt, after failing to make the case before the legislature in 2013-2014, that makes the fee leave a bad taste in people's mouths.

Update: Tony Webster tweeted what looks to be where our reader found the photo. Follow through to the discussion on the Oasis Cafe's Facebook page:

Shameful: Oasis Café in Stillwater appears to have been adding 35¢ “minimum wage fee” on restaurant checks https://t.co/nJRbLur9PK

— Tony Webster (@webster) August 4, 2014

Let us emphasis the "tacky" in tacked-on petty resistance.

The restaurant industry had tried--but failed--to make the case to the Minnesota legislature for a "tip credit" system under which wait staff could be paid less than the new minimum wage. New legislation raised the state's minimum wage to $8.00/hr  on August 1, with new raises for workers until the wage is $9.50/hr in August 2016.

In June, Governor Dayton created a kerfuffle when the Rochester Post Bulletin reported that his sons made a strong case for such a change in the new law; the statement was later clarified as the administration rapidly walked it back. 

For reasons why the case for the tip credit failed to being with, we recommend trying to follow one advocate's testimony at Lobbyist thinks BSP post "one of the stupidest articles I have read," wants to buy us a drink.

That presentation, however, is statesman-like compared to this pettiness, and we have to wonder how many others will reflect, as we did, that thirty-five cents split between two diners at breakfast is too great a burden in the effort to make work pay. 

Photo: We've redacted the name of the resturant (which is also part of the pancake name) for this tab, as well as the name of the server.

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Comments

[Craig Westover]

I might agree this is a little tacky, but then I am not forced to eat at this restaurant and can still eat elsewhere. On the other hand, when I buy my license tabs each each year, which I am forced to do if I want to drive, I have to pay a "filing fee" to have my license tab renewal recorded and a "tech fee" for computer maintenance although the state is incapable of accepting an online check issued directly from my bank and the state has the chutzpah to charge me a "convenience fee" to use a credit card. Yea, my complaint is a little petty, too, but perhaps seeing that 35-cents on the bill will remind people that somebody's gonna pay pay the increased wage and better to make it transparent than to hide it by raising the cost of the meal.

[Christina]

I don't understand why you removed the restaurant name. I would like to avoid places like this. If they need to raise prices to cover the wage hike, so be it. This is simply classless and I would never want to support a business that was this disrespectful to employees.

Editor: A number of people have raised this question. I was thinking of the staff. Waited on tables one summer and it was hard work.

[Max Hailperin]

Those of us who don't know the restaurant's location don't know the applicable sales tax rate and hence can't figure this out, but it would be interesting for she who knows to check whether the "fee" was included in the amount that the tax (shown above it) was calculated based upon. I'm pretty sure calling part of your price a fee doesn't exempt you from charging sales tax on it.

[tom]

Any place doing this is confessing, since otherwise we wouldn't know, that they're paying their servers the bare minimum wage.

[Ms. Virginia Middleton]

Oasis Cafe, Stillwater

Editor: Yes, we've updated with Tony Webster's tweet that links to the Facebook page where it was posted.

[Rory kramer]

Max Hailperin-anyone who has taken a math class knows that to figure out the sales tax rate, you take the amount of tax charged divided by the subtotal, which in this case amounts to approx. 7.28%. The 35-cent Min Wage fee equates to a 2.5% charge on the subtotal. The 2.5% charge is no different than the fees Craig Westover mentioned about license plate tabs. If you're going to go on a witch-hunt to ostracize the restaurant owner for having the audacity to run their business the way they want to, you must have some serious amounts of free-time on your hands.

[Phoenix Woman]

Rory Kramer: Anyone who didn't attend the ALEC-sponsored versions of high school civics class knows the difference between a fee levied by a municipality for the public good and a political grandstanding stunt that benefits nobody aside from the restaurant's owner.

[Bill]

Rory kramer - Thanks for the econ lesson. Now let me give you one. If I don't like the way a business operates I won't spend my money there. Caveat emptor.

[gene]

Rory,
Many companies, after beginning to take credit cards, raised their prices. There are environmental fees listed on receipts of car mechanic repairs, there are fees on my insurance payment which I elect to accept, to pay monthly. Many high end eating places do minimum wage, the waitstaffs in some places split the tips of that shift, so they Work Together helping each other serve you. There are fees everywhere. Spend your money carefully...ease up on the anguish.

[Max Hailperin]

Rory Kramer- snark may help you feel good, but it doesn't help you reason clearly. Now that we know that the café is in Stillwater, we know that the sales tax rate (as elsewhere in Washington County) is 7.125% (not 7.28%) and that the $1.02 sales tax was not calculated on the $14.00 subtotal, as you assumed, but rather on the $14.35 subtotal with "fee". Your having gotten this wrong illustrates that although the café owner is certainly within his rights to raise his prices 2.5%, the way he chose to communicate that he had done so was potentially confusing. (By the way, if you had looked me up you would have discovered that I have not only taken a math class but taught one, and that I also happen to be Treasurer of a for-profit corporation engaged in retail business in Minnesota. But this really isn't about me.)

[gene]

Rory,
Good comments supporting your reasons.
In Newspaper editorials, it seems that many contributers are supporting his actions. I have never been a server. But am in a service industry. I get tips once in a while, even after I delivered what I promised. And I am thankful. There are many hidden fees that we dont know about.