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Restaurants Will Soon Be Able to Add 10 Percent ‘COVID-Recovery Charge’ to Customer Checks

Cloris Ying (Unsplash)

Sept. 16, 2020 By Michael Dorgan

Restaurants will soon be able to add a 10 percent service charge to the tab.

The City Council voted Wednesday to approve legislation that would temporarily permit restaurants to add a “COVID-19 Recovery Charge” to customer checks.

The legislation is expected to be signed by the mayor – which would then go into effect immediately — and last until 90 days after full indoor dining is restored.

Restaurants have been decimated by strict COVID-19 lockdown measures and indoor dining – which has been barred since March – is only set to resume at 25 percent capacity on Sept. 30.

The restrictions have already forced many eateries to permanently shutter due to a loss in business and plummeting revenue.

The legislation was passed on a 46-to-2 vote and overrides a previous law that prohibits restaurants from charging any fees beyond the price of food, drink and taxes.

Restaurants that choose to implement the charge would have to notify the customer by placing it at the bottom of each menu as well as stating it on the customer tab.

Staten Island Council Member Joe Borelli, who introduced the legislation, said the charge will help restaurants cover rising labor costs and COVID-19 compliance costs.

“This bill fundamentally is about saving the restaurant industry,” Borelli told the New York Post after yesterday’s vote.

“We’re trying to give restaurants the option of adding a surcharge to let their customers know they need to raise a little bit more money to make their ends meet,” Borelli said.

He added that restaurants are continuing to close down because they are losing money while operating under coronavirus restrictions.

The NYC Hospitality Alliance is backing the legislation saying that many restaurant owners told them a surcharge would help them generate revenue to purchase PPE, cover outdoor dining expenses and keep workers employed.

Queens Council Member Adrienne Adams was one of only two representatives who voted down the legislation arguing that low-wage restaurant workers may get smaller tips because of the surcharge.

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jose sanchez

now what’s wrong with this council person charging the customer for COVID 10% is going to hurt the business more 10% covid/8/1/2 city tax plus 10 or 20 percent tip wow no one is going to eat out that is crazy

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Ralph

What’s interesting about this is that some restaurants are actually doing better with outdoor dining than before covid. IMHO, just another ill conceived money grab by restaurants. They’ve already trained Americans to pay their wait staff for them, now any business hardship needs to be borne by customers too? What a farce.

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COCED

Well, customers may respond by deducting this 10% less from their tips. So, waiters will be the people who’s going to suffer. That’s it. Scam from the city of some sort.
Time to reopen the inside dining if they really want to help restaurant business survive!

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Miggie Warms

I do not understand this legislation. Restaurants have always been free to set their prices as they see fit. This seems like a ploy (similar to bait-and-switch or including a mandatory tip) that is designed to deceive unwary customers, regardless of any (probably “small print”) disclosure at the bottom of a menu. What about multi-page menus? Would the disclosure be required to take up space at the bottom of each page? There is nothing wrong with raising prices to cover costs. There IS something wrong with this scheme (which, by the way, should NOT be called a “service charge” unless it IS a mandatory tip, as a service charge is NOT a charge to recover costs for the restaurant owner. It is not clear whether this was an error on the part of the writer of the article or on the part of the legislators, but a service charge is a service charge and the English language is the English language.)

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ASensibleMan

Yeah, well opening up restaurants fully would be a much better idea.

Covid has been OVER in New York City since MAY. We know this with 100% certainty. This is ALL political.

Cuomo and DeBlasio are criminals who should be in jail.

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Mutley

This is ridiculous as I have already seen my local restaurants jack up prices and give less of a portion on their meals in order to try and catch up on lost money. This looks along the lines of price gouging if you ask me.

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