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NYC Restaurants Can Start Charging Diners a COVID-19 Recovery Charge

NBC New York logo NBC New York 10/17/2020 Gaby Acevedo
a group of people riding on the back of a bicycle: NEW YORK, NEW YORK – JUNE 30: Customers dine outside a restaurant on the Upper East Side as New York City moves into Phase 2 of re-opening following restrictions imposed to curb the coronavirus pandemic on June 30, 2020. Phase 2 permits the reopening of offices, in-store retail, outdoor dining, barbers and beauty parlors and numerous other businesses. Phase 2 is the second of four phased stages designated by the state. (Photo by Noam Galai/Getty Images) © Getty Images

NEW YORK, NEW YORK – JUNE 30: Customers dine outside a restaurant on the Upper East Side as New York City moves into Phase 2 of re-opening following restrictions imposed to curb the coronavirus pandemic on June 30, 2020. Phase 2 permits the reopening of offices, in-store retail, outdoor dining, barbers and beauty parlors and numerous other businesses. Phase 2 is the second of four phased stages designated by the state. (Photo by Noam Galai/Getty Images)

Starting this weekend, diners at restaurants and bars in New York City could see an extra charge added to their final bill.

Restaurants in the city are now allowed to add a COVID-19 recovery charge to diner eating inside or outdoors -- takeaway and delivery orders are excluded. Participating restaurants must clearly display any additional costs on their menus.

Last month, the NYC Council approved legislation to add up to a 10 percent “COVID-19 Recovery Charge" on a customer’s total bill. Councilman Joseph C. Borelli, who introduced the bill, says city restaurants have significantly suffered from the coronavirus pandemic and they need additional help to get their businesses back on track.

"This cost will come off 90 days after the restaurant capacity limits have ended, whereas if they raise the price of their meals, there's no telling whether or not they will keep the price up," Borelli said. "We need those businesses to stay in business. If they are not in business, those hundreds of thousands of people will not have jobs."

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The Staten Island Republican said he believes the extra money could be a lifeline used to support restaurant staff through the pandemic.

"Use it to add a surcharge for their kitchen staff, to add a surcharge for health care premiums or paid sick leave funds for their employees," Borelli suggested.

According to the legislation, only small restaurants can apply the surcharge, which has to be clearly stated on the diner's bill. Pushcarts, stands, vehicles, or large chains aren't included in the bill.

In a statement, a worker rights group opposed the bill, saying that the proposed surcharge without guarantees of a minimum wage for employees could hurt workers.

“If the City Council allows employers to add a surcharge, without these employers paying their workers a full minimum wage, the surcharge would cut into workers’ already-reduced customer tips without any guarantee of tipped restaurant workers receiving the bare minimum wage," One Fair Wage President Saru Jayaraman said.

Even some restaurant owners are questioning whether charging customers more to eat out — which some are hesitant to do anyway — will really help them recover.

"I think they are chasing people away from restaurants, instead of enticing them and pulling them into restaurants to try and create more business," said Scott Giunta, owner of Arturo's Restaurant in Greenwich Village. "(Customers) are not taking their alcohol, they are not taking they dessert. They are just gonna take the basics and go home."

Carol Giunta, manager of the restaurant, said the bill could work against servers, as waitstaff could potentially see their tips decrease on a smaller dinner bill.

"Perhaps customers will think, 'They are getting 10 percent, that's part of the waiter's service tip," she said.

Still some see the potential benefits.

"I'm not sure if it will help, but I think it's a step in the right direction, because without the funding they could go out of business long-term," said Spencer Kosterinsky, a customer at the restaurant. "As long as I knew about it beforehand. If I saw it after the fact without knowing about it, then it would make me a little upset."

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