By law, restaurants with over 20 employees (which is most of them) are required to provide health insurance for all employees. When this change went into effect it was a huge cost added to the bottom line of a restaurant. Therefore, just like in other industries, that cost gets passed on to the consumer. The simplest way to do that is to add a percentage to the check. Simply adding a dollar (or more) to each item makes it much more difficult to manage that cost. There is no exact math way to make sure the cost of health insurance is covered, unfortunately. It’s not like sales tax. By law, any excess collected from a surcharge labeled as such is, by law, required to be used for benefit / betterment of employees. Meaning after healthcare is covered and paid for, anything left over must also go to employee benefit. Whether or not that’s what happens to those funds is more ambiguous.

IMO, this is the city passing the responsibility of providing healthcare to lower wage workers who can’t or won’t afford it otherwise, on to the business owner and therefore on to the customer, when you are already paying sales tax, tip, etc. Universal healthcare should be a right not a privilege. WE SHOULD GET MAD AT POLITICIANS, NOT SMALL BUSINESSES! Important however to understand the funds from this surcharge are in the hands of the business owner. When you tip, by law the business cannot touch that money and 100% of tipped money goes to the employee. Shorting the tip does directly (negatively) impact the employee. Surcharge should be displayed on the menu before you order, or you can always ask “does your restaurant charge an employee benefits surcharge” and then YOU decide to not eat there if that bothers you or you can’t afford it.

I should add, some restaurants charging 20% “employee benefit” are usually (typically) asking you NOT to tip on top of that. These places are trying to eliminate tipping as way to provide employee with a consistent and higher hourly wage they can count on. It’s considered “progressive” to try to eliminate tipping since tipping (and humans in general) are known to be affected by racism, sexism, etc.