October 25, 2014

Cafe Gets Mixed Reviews Over Minimum Wage Fee

minimum wage fee

A Minnesota restaurant is getting mixed reviews about a new fee added to its bills. But it isn’t the 35-cent surcharge itself that has customers taking notice. The fee, added to each bill after the tax charge, is a designated minimum wage fee.

Minnesota raised its minimum wage by 75 cents earlier this month. It is the state’s first minimum wage increase since 2009.

So the fee, enacted by Oasis Café in Stillwater, is meant to offset some of the added cost for the restaurant due to the increase. Management has estimated that the pay increase will cost the business more than $10,000 a year.

So it seems necessary for the independently owned restaurant to pass along some of that added cost. But designating the fee as such isn’t quite as necessary. And it has definitely turned off some customers, who have taken to leaving negative reviews and comments on social media.

One comment left on the company’s Facebook page, as reported by CBS Minnesota, read:

“It’s Oasis way of blaming our government for trying to set a fair living wage. It is political grandstanding.”

But not everyone has taken issue with the fee. Some customers on social media have voiced their understanding or approval of the restaurant’s actions. The company’s owners and employees have also chimed in to voice support and explain the thought behind enacting the fee.

Owners Craig and Deb Beemer posted a statement to the company’s Facebook page, further explaining their decision to employ fee:

“Our decision to offset the recent increase in minimum wage was what we believed to be the most honest and transparent way to communicate a significant increase in our operating cost. Rather than raise menu prices, we decided to charge a flat fee per guest check.”

Raising menu prices slightly seems like the more conventional route to take when faced with added costs. That likely wouldn’t have led to so many angry customers. But it also wouldn’t have called attention to the reason why the increase was necessary, which was apparently the owners’ intent.

Since the minimum wage increase has already gone into effect, it seems the fee isn’t going to make any major changes on that front. But the owners have stated that they would like for Minnesota to pass a tip credit, as 43 other states have done.

This is a way for employers to apply the amount of tips employees regularly receive against the business’s minimum wage requirement. So it is possible that the attention gained by enacting this fee could contribute to a push for such legislation.

Image: Facebook

7 Comments ▼

Annie Pilon - Staff Writer


Annie Pilon Annie Pilon is a staff writer for Small Business Trends, covering entrepreneur profiles and feature stories. She is a freelance writer specializing in marketing, social media, and creative topics. When she’s not writing for her various freelance projects or her personal blog Wattlebird, she can be found exploring all that her home state of Michigan has to offer.

7 Reactions

  1. Also remember that raising menu prices means they would have to change all their menus, signage, website, etc. which ends up being another additional cost. Most people support increasing minimum wage, but don’t consider the trickle down effect…and higher prices…that it leads to.

    • That’s true. It does seem like raising menu prices would cost customers more overall. There are definitely both pros and cons to doing it this way.

    • I do find it an unusual thing to visually add, but they know their customers better than anyone and (I hope) weighed up the pros/cons of listing a minimum wage fee.

      Cost-wise, I’m wondering whether it’ll put some customers off to the point of affecting sales anyway, so that it would have been better to have raised menu prices anyway and all the cost changes involved in doing so.

      • I’m not sure. They have definitely been up front about it since making the change, since it’s right there on the bill. But I don’t know if they announced it beforehand or anything. And I guess we’ll see if the increase puts customers off. A lot of people on their Facebook change seemed supportive of this method, but the initial reaction was pretty negative.

      • Oops, sorry the first part was in response to another comment!

  2. Hi Annie,

    Do you know whether diners are informed beforehand or get this as a “surprise” on their bills? To me, that’s a big distinction. If I know in advance, I can choose to eat there or go elsewhere — but if I got this presented to me at the end I’d scream bloody murder at what I’d perceive as a junk fee. (Not to mention the politics of it…)

    (Note that I’m the person who took the bus all around San Diego one trip rather than rent a car because the hotel I was trapped at added a parking fee even though every room had a designated parking space. Junk fees and me do not place in the same sandbox!)

    • Hi Daria,
      I’m not sure. They have definitely been up front about it since making the change, since it’s right there on the bill. But I don’t know if they announced it beforehand or post it in the restaurant or anything. It seems like a lot of their customers at least know about it now, since it’s been covered and they’ve posted about it on their Facebook page quite a bit since it went public. And quite a few have said they don’t plan to go to this restaurant anymore for that reason. So they might end up changing it at some point anyway – who knows!

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