New York City Council plans to allow restaurant supplements after pandemic

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Dive brief:

  • New York City City Council is prepare an invoice which would allow restaurant supplements of up to 15%. Restaurants would only be allowed to use these supplements if they pay all their employees the city’s minimum wage of $ 15 an hour before tips. The bill would repeal temporary surtax legislation introduced by Councilor Joe Borelli and approved in September.
  • Temporary COVID-19 supplement legislation allows restaurants to charge an additional 10% fee for up to 90 days after resuming meals indoors at full capacity, which arrived May 19, which means the deadline will come in August. Borelli opposes the new proposal to make these surcharges permanent, he told Silive.com.
  • New York Hotel Alliance opposes the new bill because it would end the current COVID-19 recovery surcharge law before it expires and because it would exclude restaurants that receive tip credit. The association says the changes “don’t make financial or operational sense” for New York City restaurants, which have suffered significant revenue losses after a year of tight restrictions.

Dive overview:

The tension around this bill shows how difficult it will be to determine when the pandemic “ends” for restaurants. Even though most dining restrictions have been lifted or significantly relaxed across the country and demand for restaurants is booming, many operators are still reeling from aftershocks of COVID-19.

This is why the NYCHA maintains that existing surtax legislation should remain in place.

“Restaurants want a smaller supplement while still taking the tip credit, or a larger supplement in which case they wouldn’t take the tip credit,” the association writes on its website. “The math doesn’t work any other way, and we’re also concerned that the city is overstepping its authority by amending state labor law and federal labor law.”

Borelli opposes the new legislation for a different reason – he believes it is time for the financial safety net of temporary surcharges to be phased out without being replaced.

“It was a temporary way for restaurants to openly charge their customers without raising prices in the long run. We should look for a date for his sunset and be grateful that it helped keep a few places afloat, while d ‘others had to raise their prices and I hope customers weren’t complaining, “Borelli told Silive.com

Because New York City is such a large and influential restaurant market, the city council’s decision could shape how other jurisdictions approach support for the restaurant industry as the pandemic recedes. Earlier this month, the National Restaurant Association urged state governors, mayors and lawmakers to create a state-based restaurant grant fund to support restaurants pending further federal aid, which could come a renewal of the Restaurant Revitalization Fund.



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