The New York City Council voted today to pass a bill that will give restaurants in the city the option to add a surcharge of up to 10% to diners’ bills as a measure of economic recovery during the pandemic. The clause will take effect immediately after the mayor who supports the bill signs it into law. Allow indoor dining until 90 days.
Joseph Borelli, a member of Parliament and patron of the bill representing the south coast of Staten Island, said in a statement: “This bill will give restaurants the freedom they need to increase their income to help them make up for the rapidly rising workforce. And compliance costs and keep them in business.”
The extra income from the surcharge can be used for any part of the business chosen by the restaurant owner, although it must be clear to the customer that the fee is not interchangeable with tips, and the money cannot be used for employee salaries.
In a statement commending the New York City Council, Andrew Rigie, executive director of the New York Hotel Industry Alliance, said that the bill will enable New York City restaurants to “have survival fighters.”
Not everyone is satisfied with the city council’s decision. Saru Jayaraman, chairman of One Fair Wage, a national organization that advocates the removal of the minimum wage for tipping, said in a statement that the surcharge may “ingest workers’ reduced customer tips” during the pandemic because diners may choose to be them. Tip when you see that the COVID-19 surcharge is automatically added to your bill.
Jayaraman said: “In this unprecedented crisis, it is vital to support the restaurant industry in New York City, but we must not forget the various types of people who have suffered severe income losses in the past six months that have adversely affected their lives. Food and beverage workers.” A fair wage asked the city council to reject the legislation unless the surcharge can only be used by restaurants that do not use tip deductions and have paid each worker the city’s minimum wage of $15 an hour.
The COVID-19 recovery surcharge is an evolution of a bill originally proposed by Borelli two years ago. In the initial bill, Borelli called on the city to allow restaurants to add up to 5% surcharges on customer bills to offset the increase in rent and other operating costs.
At that time, more than 200 restaurants signed a letter asking for additional fees. Diner critic Ryan Sutton objected to a version of the measure originally introduced in 2018, saying that the rule would allow restaurants to artificially keep menu prices at a low level, and diners would eventually check out late at night.
Mayor Bill de Blasio also opposed the original bill, but now supports the surcharge in light of the current economic crisis. The mayor’s spokesperson said: “The mayor supports the bill and he will be proud of signing it.” “This is an unprecedented emergency. We will do our best to support the industry, which has thousands of New Yorkers. Make us the greatest city in the world.” The date and time when the bill is signed into law has yet to be determined.
Other parts of the state and other cities in the United States (including San Francisco and Los Angeles) have allowed surcharges.
In New York City, the bill never moved forward because it was a redesigned COVID-19 recovery measure. During the pandemic, the city council has urgently adopted many emergency support measures for small businesses, including limiting the cost of food delivery services to restaurants to 20% and exempting sidewalk cafes for one year.
A spokesperson for Borelli confirmed that his office will continue to promote the city’s permanent surcharge subsidy after the current emergency measures expire.