Living Wage Surcharge

From the day we started Hermit Woods Winery we have dedicated ourselves and our business to be the best citizens that we can be. We strive everyday to live up to this standard in the way we run our business, interact with our community and the world.

We engage in practices that we feel are sustainable (to the degree possible), we support our local farmers and we strive to create products that are healthy and pesticide free. We support other small business in our area and state with our purchases and business practices. We are installing solar panels to power our business. Most important, we think carefully about every decision we make to try and live up to the high standard we have set for ourselves. We are not perfect and we know there is always more we can do. Paying our employees a living wage is one of those things we could do better on.

There has been a lot of debate over this past election year with regard to the minimum wage. This debate got us thinking, not so much what the minimum wage should be,  but what should we pay our employees. After some careful research and careful consideration of this question, we have decided that we need to pay our employees a living wage.

So what is a living wage? It is the wage that is high enough to adequately put a roof over your head, feed yourself and your family and maintain a normal standard of living. Of course for each person this is going to be different depending on whether you are just supporting yourself or a family. From the research we have done, a living wage in the Lakes Region of New Hampshire, would require an employee to make a minimum of $15 an hour.

Our employees work hard every day to provide a quality experience to our customers and help us run and grow our business and we would like to compensate them for their hard work by bringing their pay in line with a living wage. To do this, we had the choice of either raising the prices of our products, or adding a surcharge of 3.5% to every sale.

We have chosen to add a 3.5% surcharge for the following reasons:

  • We feel our wines price should reflect the quality of the fruit and the work that goes into making them.
  • Charging a surcharge allows us to be upfront with our customers about the increased cost and how the additional funds will be applied.
  • Administering a surcharge will make it easier to identify and quantify the additional revenue required to achieve our goal.

Other ways wineries and businesses like ours help compensate their employees is by promoting tipping. Since we started our winery over five years ago we made the decision that we would not encourage tipping. Since tipping in the wine business is far less common than in the restaurant business, to ensure our employees were fairly compensated we felt their pay should reflect the work they do without having to earn tips.

We sincerely hope that you, our customer, understands our decision and will stand behind it with us. For our part, we will continue to produce the highest quality wine we can produce and ensure that everyone who visits our winery is provided a quality experience and has the opportunity to learn about our wine and the wine industry.

Together we will make our community a better place to live for all of us.

Questions and Answers:

What is a surcharge and how much is it? A surcharge is a fee added to the total cost of your purchases to help support raising our employees’ salary to a living wage. We determined that we would need a minimum of 3.5% on each purchase to afford to do this.

How did you arrive at the rate of 3.5%? We added up the current cost of all our employees for the year, calculated how much money would be required to bring everyone to $15 an hour from their current rate, then determined what percentage increase of our current sales would be required to cover or come close to covering the additional cost.

Will any of the funds raised through the surcharge be used in any other way? No, at the end of the day, the cost of raising all our employees wages will actually cost us more than what we raise via the surcharge, but we felt that 3.5% was a fair and reasonable amount to ask our guests to contribute.

How will this affect my experience at Hermit Woods? This decision will not affect your experience at Hermit Woods in anyway with exception of the small fee that is added to your purchase. In fact, it is possible you experience will improve as the higher wage will likely result in the retention of our employees and a more experienced team over time. 

What will the effect of the surcharge be on my purchases?

  • $25   = .87
  • $50   = $1.75
  • $100 = $3.50

How was the “living wage” determined? $15 an hour has been widely identified as a ‘living wage’ across the country based on the cost of living in the United States. We looked closer at the cost of living in NH which is approximately 16% higher than the rest of the country, and determined that $15 dollars and hour would be the minimum for most people to adequately support themselves and their families. Of course there is not an exact number for everyone’s lifestyle, but we had to start somewhere. We looked at the following websites to help us make our decision.

http://livingwage.mit.edu/counties/33001

http://www.bestplaces.net/cost_of_living/state/new_hampshire

http://www.areavibes.com/manchester-nh/cost-of-living/

Why did you not simply raise the price of your products?

  • We feel our wines price should reflect the quality of the fruit and the work that goes into making them.
  • Charging a surcharge allows us to be upfront with our customers about the increased cost and how the additional funds will be applied.
  • Administering a surcharge will make it easier to identify and quantify the additional revenue required to achieve our goal.

Are guests expected to tip? We do not encourage tipping. We feel every guest should be provided the best experience possible and want the way we compensate our employees to reflect the highest standard of service without requiring a tip.

Can guests still offer a tip if they choose? Although we do not encourage tipping, we also do not tell people that they can’t do it. Should a guest feel that they were provided an exceptional service and wish to compensate someone for that, we will not prevent anyone from doing so.

Is this Legal? Yes, the surcharge is an added fee for services rendered and is widely publicized to ensure that everyone is aware that it will be added to their bill.

What if your customers choose not to visit the winery, or make purchases because of the surcharge? We have of course thought a lot about this question and feel strongly that our customers will support this change. There may be some who do not, however, we still feel it is the right thing to do.

Why should the customer pay for the increase in employee’s wage? In fact, the customer pays all our employees wages, along with all the other expenses required to produce our wine and operate our business.

Why doesn’t Hermit Woods just pay it’s employees more and skip the surcharge? We wish we could, however, we are a very small business and the costs of running a small business is very high. All of the revenues we currently take in are already accounted for in our budget with no additional funds available to increase salaries. As our business grows, maybe someday we will be at a place where we can afford the higher wages without the addition of a surcharge, just not yet.

You can read our recent press release about our Living Wage here.

If we have not answered all your questions, please feel free to contact us at anytime. Please direct your questions to Bob Manley, bob@hermitwoods.com or reach him by calling 603.253.7968.

Chuck Lawrence, Ken Hardcastle, and Bob Manley