City Council approves surcharge to help NYC restaurants recoup COVID-19 losses

Patrons dining outside in Bayside, Queens in June 2020. (Photo by Dean Moses)

Struggling restaurants in New York City may soon be able to institute a surcharge to diners to help recoup some of the losses they and workers suffered during the COVID-19 pandemic.

The City Council approved on Wednesday legislation (Intro. 823) that would enable all New York City restaurants to institute a 10% surcharge on each bill which would remain in effect until 90 days after all eateries are cleared to reopen at full capacity.

Some advocates expressed concern that the temporary surcharge would cut into tips left by customers for restaurant waiters, cooks and other staff. In response, City Council Speaker Corey Johnson announced a commitment to address low-wage restaurant workers through future legislation and action. 

Johnson directed his staff to formulate short-term bills to financially protect restaurant workers while also committing to legislation that would make the surcharge permanent. 

“I also think it’s important that we focus on helping out low-wage workers in these restaurants,” Johnson said during the stated meeting on Sept. 16. “All of my colleagues, I believe, share that vision and goal, and I’m committed to working on legislation, to go to Albany and to do whatever we need to do to make sure … that we’re not leaving behind low-wage workers.”

The speaker’s office later announced that Johnson would support legislation to make the restaurant surcharge permanent with various worker protection conditions.

Staten Island City Councilman Joe Borelli sponsored the temporary surcharge legislation, which passed the City Council 46-2 on Sept. 16. Queens City Councilwoman Adrienne Adams and Brooklyn City Councilman Brad Lander were the lone votes against the item.

Saru Jayaraman, president of One Fair Wage, expressed hope that the City Council would follow through with legislation to benefit restaurant workers impacted by the pandemic.

“Today, in passing a temporary surcharge without worker protections, the Council did not address the needs of hundreds of thousands of restaurant workers whose tips will be negatively impacted by the surcharge,” Jayaraman said. “We are hopeful, however, that by Speaker Corey Johnson committing to introducing a follow-up bill which would make the surcharge permanent conditioned upon protecting workers, the City Council can charter a better path forward – one in which we protect public health with indoor dining while ensuring that both workers and the businesses where they work can survive this pandemic.”

Jayaraman noted that most tipped restaurant workers were barely surviving on a sub-minimum wage, and the situation only became exacerbated once restaurants closed during the pandemic. The restoration of outdoor dining has helped put many of them back to work, but they’re still struggling to make ends meet.

“The surcharge is a good idea. But it won’t work if the restaurants that apply the surcharge aren’t paying their workers a minimum wage, as it would have cut into the already-reduced customer tips of these same workers who are already facing financial catastrophe,” Jayaraman added.

The bill now goes to Mayor Bill de Blasio for his signature.