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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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