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New Bill Would Permanently Allow Restaurants to Add Up to a 15 Percent Surcharge

The proposed legislation stipulates that restaurants would have to pay their staffers a base wage of at least $15 an hour in order to use the surcharge

People eat at an outdoor restaurant near Union Square on November 19, 2020 in New York City. Photo by John Lamparski/Getty Images

NYC restaurant surcharges — first implemented as a temporary measure to help restaurants cover extra costs during the pandemic — could be here to stay. NYC Council member Antonio Reynoso introduced a bill today that would allow restaurants and bars to permanently implement an up to 15 percent surcharge on customers’ checks, as long as the establishment pays all staffers a minimum wage of at least $15 per hour.

Reynoso, who represents parts of Bushwick, Williamsburg, and Ridgewood, introduced the bill with support from One Fair Wage, a nonprofit that lobbies across the country for the elimination of the tipped minimum wage. The proposed permanent surcharge would have to be clearly delineated on menus and cannot be applied to takeout and delivery orders, according to the text of the legislation. Food trucks and street vendors would be exempt from the proposed surcharge, as would any chain restaurant or bar with more than 15 locations.

The new legislation follows in the footsteps of a similar temporary surcharge bill that was signed into law last month. According to that bill, restaurants and bars can add an up to 10 percent surcharge to diners’ checks to cover the costs of PPE supplies and other COVID-19-related charges. The current surcharge bill is in place until 90 days after restaurants and bars return to indoor dining at full capacity.

When the temporary bill was first introduced, restaurants openly debated whether or not to use the surcharge, as it would involve upping costs for customers in the middle of the pandemic and could drive away business. By requiring restaurants to eliminate the tipped minimum wage in order to be able to use the surcharge, the new bill may push dining costs higher for customers. Surcharges would be allowed to go up to 15 percent instead of 10 percent, and menu prices may have to be adjusted to cover increased labor costs.

Since the temporary surcharge bill has become law, some restaurants have pushed forward and added COVID-19 recovery surcharges, including Lower East Side newcomer Double Chicken Please and acclaimed Peruvian restaurant Llama Inn.

If passed, the permanent surcharge legislation would go into effect 120 days after the bill is signed into law. Co-sponsors on the bill include Council member Brad Lander, who represents parts of Brooklyn including Park Slope and Carroll Gardens; Council member Jimmy Van Bramer, who represents parts of Queens including Astoria and Sunnyside; Council member Adrienne Adams who represents South Queens areas including Richmond Hill and Jamaica; and NYC’s public advocate Jumaane Williams.

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