NYC Restaurants Will Be Able to Add a COVID-19 Surcharge to Checks

On Wednesday, the New York City Council passed a bill that grants restaurants the right to add a surcharge of up to 10% on diners' checks. The additional charge is meant to offer economic support to restaurants struggling to remain open during the pandemic, given reduced capacities that will only shrink as colder weather limits outdoor dining.

"This bill will give restaurants the freedom they need to increase revenue to help cover rapidly rising labor and compliance costs and keep them in business,” said councilmember and bill sponsor Joseph Borelli in a statement.

The new bill will go into effect once it is signed by Mayor Bill de Blasio, who has supported the measure, and will extend 90 days "after the restaurant capacity limits have ended," whenever that may be.

Restaurant owners are able to use the additional charge toward any part of the business—though they must specify to customers that the fee does not count as a tip and doesn't go toward the staff. The "COVID-19 Recovery Charge" would not apply to food trucks or most chain restaurants.

"We need those businesses to stay in business," said Borelli, according to Eater. "If they are not in business, those hundreds of thousands of people will not have jobs."

While the measure has been supported by many figures in the New York restaurant world--including the New York Hospitality Alliance—it has raised concerns that it will negatively affect restaurant staff.

Saru Jayaraman, the president of One Fair Wage, said that customers could very likely choose to tip less when they see an additional charge.

“A surcharge without a minimum wage will cut into workers' tips,” she said, according to the New York Daily News. “We are not opposed to surcharges as long as there’s a guaranteed minimum wage for these workers like every other worker in every other industry.”

The idea of a restaurant surcharge is not new. In San Francisco, many restaurants have opted into a 1% surcharge that goes toward fighting climate change. It remains to be seen whether the COVID-19 surcharge will take effect in other cities besides New York.