Effective October 16, 2020, NYC restaurants and other food service establishments are permitted to add a “COVID-19 Recovery Charge” to customer checks.
The COVID-19 Recovery Charge may be imposed on outdoor or indoor dining bills (not take-out or delivery), cannot exceed more than 10% of the customer’s total bill (not including taxes and gratuity), and must be the same percentage for all customers. In addition, the amount of the COVID-19 Recovery Charge must be conspicuously listed on every page of any menu or sign listing food and beverage prices, and must be disclosed to the customer before any menu item is ordered. It must also be clear that COVID-19 Recovery Charge is a surcharge and is not a gratuity for employees. The COVID-19 Recovery Charge must also be listed on the customer’s final check, including the total dollar amount of the charge, as well as on the receipt if one is provided. For a detailed list of requirements pertaining to the COVID-19 Recovery Charge, please refer to our previous Client Alert
The City has issued FAQs addressing the COVID-19 Recovery Charge. The FAQs largely restate the provisions of the local law, but also make clear: (1) there are no restrictions on how a restaurant may use the revenue collected from the COVID-19 Recovery Charge, and (2) if customers choose to split the bill, a restaurant can charge the COVID-19 Recovery Charge to each customer. The COVID-19 Recovery Charge at Restaurants FAQs can be found here
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If you have questions or would like additional information, please contact our Employment Law Practice Group Leader Amanda M. Fugazy (firstname.lastname@example.org) or the primary EGS attorney with whom you work.