‘We don’t see those benefits’: Verve faces employee pushback over 5% health benefits fee

Editor’s note: This story was updated with additional comment from Verve that more than 75% of its retail employees are eligible for health benefits. The company declined to share how many retail employees actually receive health benefits.

As a barista tallied an order for a matcha latte into the register at the Verve Coffee Roasters on Pacific Avenue, a line item flicked onto the screen that wasn’t there earlier this summer: a 5% service fee that added $0.34 onto the $7.50 drink. 

According to a small, laminated sign between the cash register and a glass case of pastries, the additional charge, which Verve began adding to each order at its 11 California cafes in early August, helps “provide health benefits for our full-time team members.”

That doesn’t include the majority of coffeehouse workers, Verve employees told Lookout. They say that the sign announcing the new fee is misleading guests by insinuating that the worker making their coffee receives health insurance when they don’t. The new charge has also caused friction with baristas who say that as part-time employees, they don’t receive health benefits, even as they deal with customers upset at the rising cost of their coffee order. 

Lookout spoke with four current coffeehouse employees who have worked for Verve for between one and three years on the condition of anonymity to protect their positions at the company. Last week, the original sign was replaced with a new one that says the fee helps provide “health and other employee benefits for our team members.”

With the possible exception of a manager at each location, all of the coffeehouse workers and assistant managers are hourly employees, several employees told Lookout. “I don’t receive health benefits, and there are no full-time workers at the cafe I work at,” said a barista at a café in Santa Cruz. 

In an email to Lookout, Verve disputed the workers’ claims. The company said that more than 75% of its retail employees are eligible for health benefits and that the percentage is higher companywide. Employees are considered full-time and eligible for health benefits if they work at least 30 hours a week, regardless of whether they are salaried, the company said.  

However, a Verve spokesperson declined to say how many employees actually receive health care benefits, citing “confidentiality regarding those figures as they involve private employee information.” The spokesperson added that new hires learn about the benefits during orientation and eligible employees get “personalized enrollment invites, complemented by follow-up emails to prevent information loss.”

Since the fee was enacted nearly a month ago, coffeehouse workers at Verve cafés in Santa Cruz County said they’re experiencing negative customer interactions, ranging from hearing the guest complaining about the fee and how expensive the coffee is under their breath as they walk away, to having to explain when guests inquire about the sign that, as hourly workers, they don’t get health care. Some customers are confused about why they have to pay more, while others are disappointed to learn that the person making their coffee doesn’t get those benefits. 

“It brings the morale down a lot. We have customers who aren’t happy about the fee, and they aren’t happy that it doesn’t go to us,” said one employee. 

One barista who has worked at a Verve cafe in Santa Cruz County for more than two years said the awkward interactions with customers have created a difficult working environment. 

“I feel like we’re taking the hits that the company would be taking with the customers,” they said. 

Customers can ask to have the charge removed, but the fee’s presence has created a difficult environment for coffeehouse workers, especially once guests discover that the fee doesn’t support baristas. 

The 5% service charge supports expanding paid time off and paid holidays, as well as health insurance for full-time workers, a Verve representative told Lookout via email. “This service charge makes those benefits possible,” and is more direct and transparent than raising prices, the company said. 

The fee also supports some benefits for part-time workers, including paid time off, paid sick time, holiday pay and eight observed holidays a year, Verve said. Part-time workers also have access to an employee assistance program that includes physical and mental health support and financial and legal coaching. Part-time workers also receive a free bag of coffee with every paycheck, and discounts on products. 

Verve isn’t the only local business to charge a service fee, as the cost of providing employee benefits continues to increase. Health care costs rose 5-8% for employers in 2025, according to a Mercer survey. 

The surcharges — usually 3-5% of the total before tax — started showing up on the bottom of bills during the pandemic, usually to supplement labor costs like wages or health care. Cat & Cloud, another local coffeeshop with four locations in the county, charges a 3.5% health service fee, and Capitola’s Shadowbrook restaurant charges 4%, among others. 

But unlike Verve, according to Cat & Cloud workers, many of their coffeehouse employees are full-time and receive health benefits. At Shadowbrook, nearly half of the employees are full-time, and have 100% of their health care costs covered for themselves and their families by the restaurant. 

Service fees are legal, as long as the purpose of the fee is stated upfront to the customer on a sign or menu. However, they’re widely unpopular among people on the receiving end, and are criticized for artificially increasing the cost of the coffee or meal without adjusting the advertised prices. 

The move to implement the surcharge could be considered an unusual choice for Verve, which has grown from its local roots into an international company with multiple revenue streams. Since it was founded in 2007, the company has become a major brand in artisanal coffee, with 19 cafés across California and Tokyo, online whole-bean sales, a line of ready-to-drink coffees available at major grocers nationwide, and a corporate partnership with Capital One. 

Price increases on the menu are also on the horizon, said Verve. Coffee prices have doubled over the past year due to climate disasters in key growing regions, and have been exacerbated by tariffs. The service fee is intended to give guests transparency about where the money goes. “If at any point our customers prefer not to participate in this service charge, they just need to let us know – we’ll be happy to remove it,” the company said. 

Service fees aren’t meant to replace the gratuity – an optional but often expected additional payment either kept wholly by the server or shared among staff members – but hospitality workers report that tips often take a hit from confused or frustrated patrons after they see an additional, and perhaps ambiguous, charge on their bill. 

Some Verve employees have seen a noticeable decrease in tips that they blame on the new fee. “I don’t want to say correlation equals causation, but I would say there’s a pretty strong link when you’re charging people a fee that they think is going to the employees, they might feel less incentivized to tip,” a café worker said. 

The fee underscores the frustrations of some baristas who have asked for full-time hours and been denied. “There are a lot of baristas that want full-time and ask for those hours, but they don’t receive them,” a shift lead – a type of manager at Verve cafés – told Lookout. 

As a small act of resistance, and to avoid negative interactions with their customers, some baristas have begun removing the automatic charge from each bill before telling guests the total, or adding other discounts, like 10% off for working in the neighborhood, to lower the bill. 

Baristas told Lookout that, ultimately, they want their customers to know that they don’t have much control over the service fee. Said one worker: “We’re just as frustrated as many customers are about this.”

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