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Cafe Faces Heat For Adding ‘Minimum Wage Fee’ To Tab

August 7, 2014 by  

(MCT) — A small cafe in Minnesota has thrown itself into a big battle over that State’s minimum wage increases, inundating the cafe with dozens of phone calls and online comments this week after it tacked on a 35-cent fee to meal tabs.

Craig Beemer, owner of Oasis Cafe in Stillwater, said the fee is needed to offset the 75-cent wage hike that took effect Aug. 1, the first time Minnesota’s minimum wage has increased in a decade. Even with only half a dozen servers, Beemer says it will cost him $10,000 more a year to pay servers $8 an hour instead of the Federal rate of $7.25 an hour. Instead of adding it on to food prices, he added the “minimum wage fee” — the only restaurant known to do so in Minnesota so far.

It has set off a firestorm of debate on Facebook and in the area, with one customer calling the cafe Wednesday to demand a refund and others taking to Facebook to encourage people to boycott the cafe.

“We’re shocked at what’s going on,” manager Colin Orcutt said of the public response. “We’re all appalled at the response for just protecting his employees. We’re just doing what we have to do.”

It’s not the only restaurant responding to the wage hike.

Blue Plate Co., which owns eight restaurants in the Twin Cities and has about 650 workers, says the wage increase and rising expenses because of the healthcare law will cost the company $1.25 million, prompting it to increase prices and add a fee to servers when a credit card is used to pay a tip.

“We believe that the industry is overreacting,” Wade Luneburg of the MN State Council of UNITE HERE Unions told the Star Tribune this week. “Putting (minimum wage) fees on tickets and passing the cost on to consumers directly is strange at best, and creates an ‘us against them’ mentality while ordering dinner.”

At the Stillwater cafe, customers filed in Wednesday for the cafe’s signature burgers or breakfast meals. Despite online boycott threats, business has actually increased so far this week, Orcutt said.

“[Beemer] wants people to be aware we’re a small business and we’re trying to stay open,” he said, adding that the cafe considered running the restaurant without servers and more like a fast-food restaurant to make ends meet. “If you raise prices and don’t tell anyone, that seems more backhanded to me.”

Orcutt has worked in the industry for 10 years and said he supports a wage hike for people who don’t make tips, such as fast-food servers. But, he said, it’s different for the cafe’s servers, who can make $25 to $30 in tips on top of $8 an hour in a weekend.

Earlier this year, the Minnesota Restaurant Association proposed creating a two-tiered system to give non-tipped employees that higher wage, while tipped employees who earned at least $12 an hour with tips remained at $7.25 an hour. But the Legislature approved the hike for all minimum-wage employees.

Beemer, who lives in Wisconsin and has owned Oasis Cafe the past five years, wasn’t available for comment Wednesday. But Orcutt said Beemer wrote a letter to the Legislature opposing the new law.

Most customers outside the cafe Wednesday supported his decision.

“I think he did the right thing,” said customer Mike Stephan of Taylors Falls, who also owns a small business in Stillwater. “If nothing else, it’s making a bold statement.”

–Kelly Smith
Star Tribune (Minneapolis)

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(c)2014 Star Tribune (Minneapolis)

Visit the Star Tribune (Minneapolis) at www.startribune.com.

Distributed by MCT Information Services.

McClatchy-Tribune

Operated jointly by the McClatchy Company and Tribune Company, MCT serves more than 1,200 media clients, online information services and information resellers across the globe. With 600-plus contributors worldwide, MCT has an exceptional variety of sources, providing detailed analyses, opinions and perspectives.

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