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A New $3M City Fund Aims to Pay Staffers at Small Restaurants $20 Per Hour

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There are a number of requirements to apply for the fund, but restaurants can receive up to $30,000 each

A streetscape in Bed-Stuy, Brooklyn showing an empty street, medium sized buildings on either side, and a blue sky
Neighborhoods that were hardly hit by COVID-19 like Bed-Stuy, will be the focus of this program

The city has announced a new financial lifeline in hopes of helping neighborhood restaurants that are reeling in the wake of the COVID-19 crisis. The program will distribute $3 million to about 100 small restaurants located in 27 neighborhoods that have borne the brunt of the impact of the virus, including Bed-Stuy, East Harlem, Mott Haven, Jamaica, and Stapleton, on Staten Island.

Each eligible restaurant can receive up to $30,000 specifically to help with payroll costs, according to the program details. Restaurants using the funds must pay restaurant workers a minimum of $20 per hour, before tips, for the duration of the program, and commit to providing longterm economic support to their workers. The restaurants must also commit to offering free meals for community members who have been disproportionately impacted by COVID-19, like seniors with increased medical risks or low-wage essential workers like grocery store employees.

The grants, though, come with a number of different requirements. Qualifying restaurants don’t have access to the funds right away. Restaurants are responsible for paying employee wages up front and then are required to submit documentation of wage payments in order to be reimbursed. NYC’s Human Resources Administration, which is overseeing the program, will provide up to 25 percent of the total funds awarded up front to the selected restaurants.

Among applicants, preference will be given to restaurants that can “commit to ‘high-road’ employer practices” beyond the duration of the program. The practices include striving for race and gender equity at all levels of employment, from recruitment and hiring to evaluations and promotions, and committing to paying each employee the minimum wage of $15 an hour before tips within five years of reopening the restaurant.

Participating restaurants will be required to provide annual reports on wage increases among employees, but the city didn’t provide further details on how it would identify equality metrics in restaurants.

The city estimates that 1,000 restaurant staffers will be brought back to work through the program.

Restaurant group NYC Hospitality Alliance, which represents thousands of restaurants in the city, is already taking issue with some of the red tape, particularly with the wage requirements.

“It’s shocking that the Administration is pushing the political agenda of the controversial Restaurant Opportunities Center (ROC) by dangling short-term monetary relief to financially devastated restaurants in exchange for long-term financial disaster, by forcing them to sign on to their misleading wage campaign,” Andrew Rigie, the executive director of the hospitality alliance, says in a statement.

One Fair Wage, an organization that has long advocated for greater wage theft protections and the elimination of the tip credit within the restaurant industry, is listed as a financial partner in the program. One Fair Wage has often worked with ROC — the organization behind the failed revival of Colors on the LES — to lobby for higher wages for restaurant employees. ROC lobbied for the removal of the tip credit in NYC in recent years; the measure ultimately failed to pass.

One Fair Wage is also providing assistance to workers directly in the form of one-time $500 cash grants.

The funds may end up being a boost for small NYC restaurants who have struggled to access the federal coronavirus-related loan program — the Paycheck Protection Program — but the city’s previous disbursement of COVID-19 funds raises questions about how successful this program will be in the long run. The demand for those loans was far greater than what the city was able to provide, and the city was forced to abruptly pause one of the programs due to the number of applicants.