The NY City Council has reportedly voted in favor of a proposal that will allow restaurants in the city the option to add up to 10% surcharge to the bill of diners as an economic recovery fund measure during the pandemic. Immediately after the mayor signs into the law, the provision will come into effect. This will extend up to 90 days after the permission for indoor dining at full capacity is given.

Joseph Borelli, the council member, and bill sponsor represent the south shore of Staten Island. Borelli stated that with this bill, the restaurants will get the freedom they need to increase the revenue that they need to help cover speedily rising compliance and labor costs and keep them in business.

The additional revenue from surcharge can be utilized in any part of the business as per the restaurant owner’s choice. However, it should be made clear to the diners that the charge cannot be exchanged with tips and the money does not go in staff wages.

The president of One Fair Wage, Saru Jayaraman stated that the surcharge might decrease the already-reduced customer tips during the pandemic as the diner might tip the workers less when the notice the COVID-19 surcharge added by default to the bill.

Jayaraman added that it is important to support the restaurant industry of New York City during these difficult times, but the individual restaurant workers, whose lives are badly impacted by a severe income loss in the past 6 months, should not be neglected. One Fair Wage called for the City Council to discard the regulation unless the surcharge will only be applicable for restaurants that don’t use the tip credit and already pay the employees the city minimum wage i.e. $15 per hour.

The City Council has pushed through various emergency support measures on an urgent basis during the pandemic for small businesses which includes a 20% cap on the fees that the restaurants are charged by the food delivery services and a measure relinquishing sidewalk cafe fees for a year.