Rye in Dallas Adds Surcharge to Pay for Worker Healthcare

The hospitality industry faced a reckoning from its workers due to the COVID-19 pandemic and as a new generation enters the workforce. Chefs and restauranteurs all over the Metroplex are discussing how difficult it has become to hire and retain staff — an industry-wide problem that is not limited to DFW.

The team at Rye has been working on a solution for some time geared toward retaining valued workers and attracting the best new ones.

At the beginning of 2023, Tanner Agar, the owner and CEO of Rye and Apothecary, announced in a post on social media that the properties would attach a 3 percent line item to its bills that will partially cover employee benefits. The complete benefits package is available to view on the restaurants’ websites. It includes paying 50 percent of employee health insurance that includes dental and vision plans, access to group plans for employee’s partners and beneficiaries, family leave that includes not only parental leave but caring for a sick loved one and bereavement leaves, up to 15 paid days off, professional development programs including 50 percent reimbursement for professional certifications, a 50 percent employee discount to dine at the restaurants, and company outings.

“[This] is really the culmination of what we’ve been working on for five years in terms of trying to continue to make our restaurant the best it can be, which doesn’t just mean what we serve, but also means who we are as people,” Agar says. He says the group hopes to improve the benefits in the future — this was the plan they could find a financial model that worked for now.

Rye

Agar says all employees now make a minimum of $15 per hour — well above the minimum wage of $7.25 in Texas, which amounts to an annual salary of $31,200 before taxes when working a 40-hour week. That’s enough to spend more than half their monthly income on the average rent in Dallas and dedicate the rest to food, gas, childcare, the other 50 percent of their health insurance, and other necessities. And, to put the numbers plainly, diners who pay a 3 percent surcharge on a $100 bill are paying $3 additional dollars for their meal. Diners can opt out of the fee — if their conscience allows it.

“We could have just raised our prices and buried it in there,” Agar says. “We felt that it’s a choice to support Rye and Apothecary. And, it’s a choice for us to better show our guests what they’re supporting, and better show our team what they’re supporting by being here every day.”

Rye’s original location in McKinney burned down in August. Funds are still being raised to reopen, which Agar hopes will happen in 2023. It held a “Fyre Fest” dinner in October to raise reopening money. Despite that, the team saw through plans that began in the summer to offer employee benefits. The package was designed to cover all employees who work at least 36 hours a week, about 25 employees, a line that was drawn ensuring that line cooks and back-of-house team members, who do not supplement their income with tips, would be included.

Agar has never had an employer in his career in the food industry offer him health insurance, and he hasn’t had insurance since 2014. “I’ve just been hoping nothing went wrong. And unfortunately, a lot of my colleagues are under the exact same strategy. That is the strategy that the industry survives on,” Agar says. But it doesn’t have to be — it is part and parcel of a broken industry model that can be fixed, with people like Agar leading the charge.

Samantha Marie

Agar was inspired by dining in San Francisco, where many restaurants voluntarily list a “mandate” surcharge on bills following a city ordinance that requires businesses with more than 20 employees to set aside money for healthcare for their workers. Eater San Francisco wrote an explainer about tipping on a bill with a surcharge, which encourages diners to ask their sever what is appropriate if they’re unsure — and that is what diners at Rye should do as well. Agar has been prepping his front-of-house team to explain.

Fine dining institutions in several cities without mandates have also instituted a surcharge. In Boston, it hovers around 20 percent. Organization Good Work Austin is dedicated to helping small businesses figure out financial plans that allow them to offer benefits to their employees that dozens of establishments participate in. “I was just at a restaurant over Christmas in Minneapolis, that had on their menu that it was a no tip necessary environment, [and] that they applied 21 percent to every tab all the time,” Agar says. “[That is] a way to create wages and benefits for their staff.”

The question for Rye and Apothecary has been: Will its customers support this transparent surcharge to benefit workers? Following some local press, Rye in Dallas has been flooded with negative reviews on Google and Yelp, some apparently from people who have not dined there. It is actively combatting that deluge by flagging those reviews. Those are not the guests Rye is courting. Instead, Agar hopes to engage long-standing and new guests who subscribe to an intrinsic belief that the people who serve them should be taken care of — or, at the very least, have the option to get access to healthcare when they’re sick.

“It would be very easy for somebody to say, ‘Providing for your people is not my job. You should have made your restaurant more profitable.’ Or say they don’t want to pay more and us forcing it on them is unreasonable,” Agar says. “But I think what we risk on the other side is greater, that we continue to perpetuate a cycle that exploits vulnerable people, and doesn’t advocate for change.”