On Wednesday, the council approved a law that allows restaurants to add a “COVID-19 Recovery Charge” to a customer’s bill, as long as the charge is “clearly disclosed” on the menu and bill.
According to the law, the charge can only be up to 10% of the customer’s total bill.
Restaurants in New York City have been hit particularly hard by the coronavirus pandemic, starting with the state-wide lockdown and restrictions on in-person dining.
Even now, restaurants in the city are only allowed to serve food outdoors. Starting on Sept. 30, restaurants will be allowed to offer indoor dining, but only at a 25% capacity.
There are concerns as to whether 25% capacity for indoor dining will be enough to actually help struggling restaurants stay financially afloat.
“I know that we’re going to be fine, however, 25% for a lot smaller restaurants is not going to cut the bill, not when you have those looming commercial New York real estate to pay,” Tren'ness Woods-Black, the vice president of communications of Sylvia’s, told FOX Business’s Maria Bartiromo on Monday.
The new law, sponsored by Staten Island Council Member Joe Borelli, hopes to give restaurants a bit more assistance.
Previously, restaurants weren’t allowed to add an extra charge in order to make up for coronavirus losses, “even if such surcharge is clearly disclosed,” the NYC Council website said.
Now, restaurants have the option of including the 10% charge, effective immediately.
“The City’s restaurant and hospitality industry has been hit particularly hard during the pandemic, with many barely able to survive on outdoor dining or takeout,” a council press release said. “Even when indoor dining resumes, restaurants will still operate below capacity and need the ability to charge a reasonable dining fee to stay afloat.”
According to NBC New York, the bill only allows small restaurants to add the recovery charge to their customers’ bills -- that doesn’t include “pushcarts, stands, vehicles or large chains.”
Restaurants that are eligible are not required to include the fee, the city council release said.
The COVID-19 relief charge will only last “until 90 days after full indoor dining is once again permitted,” the bill says.
After that period of time, restaurants will no longer be allowed to charge patrons the extra 10%.
“This bill will give restaurants the freedom they need to increase revenue to help cover rapidly rising labor and compliance costs and keep them in business,” Borelli said in a statement.
“Restaurants in New York City have been getting crushed by massively increasing costs over the last five years and their options for increasing revenue have been narrowing,” Borelli added. “This new policy is coming as a result of the impact of COVID-19 on our city but I have every intention of making this change permanent.”