A Dallas restaurant group is getting hit with scathing reviews over a 3% fee to fund employees' healthcare and time off — but it's part of a growing trend

• Diners at a pair of Dallas restaurants will now be charged a special 3% fee on their tabs.
• The owners introduced the charge to cover health insurance and paid time off for their staff.

The owners of two trendy Dallas establishments have rolled out a new fee they say will go toward covering health insurance and paid time off for their workers.

Rye, an American small-plates restaurant, and its next-door sibling, Apothecary, a craft-cocktail bar, are now tacking a 3% surcharge onto diners' tabs to fund the benefits. The charge, which is new for the group in 2023, is separate from gratuity.

Initial reaction to the announcement was completely positive, Walkabout Hospitality Group CEO Tanner Agar told Insider, but that shifted after his story appeared in the Dallas Morning News on Friday.

Since then, Agar says numerous reviewers have been leaving one- and two-star ratings on Google and Yelp accusing his team of being deceptive about the charge and referring to restaurant staff as "servants."

To the claims of a lack of transparency, Agar pointed to signs in the restaurant and QR codes on its menus linking to a notice on its websites explaining the fee and what it's used for. It also says diners can ask to have the charge removed.

Employees now have up to half of their premiums covered for themselves and their families, as well as a minimum of five days of paid time off per year — a rarity in the restaurant industry. Agar said he was among those who didn't have health coverage prior to this change.

The Walkabout group is far from the first to make the move, however.

Healthcare surcharges have been cropping up at eateries across the US over the past decade, and in the early days was a way to offset costs related to the Affordable Care Act, or Obamacare.

Last August, one in six respondents to a National Restaurant Association survey said they were adding fees or surcharges to customer checks in order to pay for higher costs.

Some of these decisions have been met with controversy as diners object to having an additional expense appear on their bills. One class-action lawsuit dragged on for several years in California that accused a restaurant group with price fixing, but that eventually fizzled out.

One Minnesota law firm — where rules about gratuities are particularly strict — says surcharges are on stronger legal ground when the restaurant is specific about what the charge pays for, or gives patrons the ability to opt out (both of which Walkabout does).

Early last year, the owners of a nationally recognized Russian gourmet restaurant in Portland, Oregon, ended optional tips on their guest checks in favor of a 22% service charge on all orders. The move allowed the owners to offer a $25 minimum hourly wage to staff, as well as provide health insurance, moves which the restaurant clearly communicated to its patrons.

To the criticism that restaurants should simply raise their menu prices to pay for additional labor costs, Agar says that would make the cost mandatory for all patrons, even those that don't agree with him on this issue. A separate fee is "more empowering" for guests who want to support a change in the industry, he said.

"Every time you spend a dollar, that's a vote for the world you want to see," Agar said.