Minnesota Restaurant Charges Customers “Minimum Wage Fee” to Offset New Pay Laws

Your News Companion by Ben Mathis-Lilley
Aug. 6 2014 7:22 PM

Minnesota Restaurant Charges Customers “Minimum Wage Fee” to Offset New Pay Laws

The minimum wage fee.

WCCO This Morning/Facebook

A Minnesota restaurant isn’t happy about a recent minimum wage hike in the state. The Oasis Cafe in Stillwater, Minn. decided to do something about it—it’s charging customers a minimum wage fee of 35-cents to offset the costs. While the cost of the fee isn’t likely to deter customers, the tacky political grandstanding has rubbed some customers the wrong way. After all, the restaurant’s owners could, say, just hike the price of waffle fries from $1 to $1.35 without customers decamping for Burger King. As an employee there’s nothing quite like your boss quibbling over a 35-cent pay raise to make you feel valued.

 “The Oasis management says they estimate the pay increase is costing them more than $10,000 a year,” CBS Minnesota reports. That’s not an insignificant amount of money for a local restaurant, but the 10 grand figure doesn’t seem to include a potential “waffle fry fee.” Also, when you break it down $10,000 averages out to roughly $27 in increased labor costs each day for the restaurant. That means the restaurant is essentially paying its 12 hourly employees an extra $2.28 per day.


The restaurant responded to customer complaints on Facebook. Here’s what they had to say, via KMSP FOX 9:

With regards to why we're charging a $.35 fee to cover the recent $.75 increase in minimum wage…we estimate the increase in labor cost will cost our company more than $10,000 per year…which has to be offset by an increase in revenue in order to operate profitably. Rather than increase the prices of our menu items, we chose to charge a flat fee. If the state of Minnesota would pass tip credit, like 43 other states have done, none of this would be necessary. For what it's worth, we pay our people very well. Our dishwashers start at $10/hour, our cooks start at $12/hour and our servers average more than $20 when you consider what they earn in tips.

Elliot Hannon is a writer in Washington, D.C. Follow him on Twitter.



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