Dozens of NYC Restaurant Workers Saw Drop in Tips After COVID-19 Surcharge, Survey Says

A new report out today has revealed that dozens of New York restaurant workers saw their tips reduced after the city temporarily allowed restaurants to tack on an optional surcharge of up to 10 percent last October to recoup funds lost due to the COVID-19 pandemic. A majority of the restaurant workers surveyed for the report also said their tips had declined after trying to get customers to follow safety protocols, and that restaurant owners weren’t consistently enforcing safety guidelines at their establishments.

The report — created by One Fair Wage, the organization campaigning to create a full minimum wage for restaurant workers in New York excluding tips — included responses from 344 and 450 restaurants workers from NYC and New York State, respectively. NYC workers were surveyed between January 25 and 31 this year, and workers outside the city were surveyed last year between October 6 and November 10.

In NYC, 35 percent of the workers surveyed said their restaurants had adopted the surcharge, and 57 percent of those workers said that their tips had declined as a result. Many of the workers surveyed reported confusion among diners who believed that the surcharge was going toward covering staffer salaries, when in reality the surcharge can be applied to whatever costs the restaurant owner deems fit. Among the workers who reported a decline in tips, 43 percent said the decline was 25 percent or more.

This additional decline comes on top of employees already seeing their tips drop after the start of the COVID-19 pandemic last year, according to the report. Fifty-nine percent of all restaurant workers surveyed indicated that their tips had declined since the start of the pandemic, and the problem was even more acute for Black restaurant workers, 75 percent of whom reported that their tips had declined by 50 percent or more.

The decline in tips can largely be attributed to restaurant workers having to enforce COVID-19 safety guidelines, according to the report. Sixty-five percent of workers surveyed reported that they lost tips after asking people to wear masks or attempting to enforce social distancing. The issue was once again more acute for Black workers, 71 percent of whom reported a drop in tips after trying to enforce safety measures.

Workers had to contend with these losses while largely feeling uncomfortable and unsafe about returning to work during the pandemic, according to the report. Forty-two percent of the workers surveyed reported an increased in sexual harassment by customers during the pandemic, including requests that servers remove their masks so they could see them smile and some people even hugging servers without their permission while not wearing masks.

Workers had to contend with health risks too, according to the report. Of the workers surveyed in the report, nearly 80 percent reported that their employers were not consistently following COVID-19 safety protocols. Among the safety issues, social distancing seemed to be the biggest cause for concern with only 57 percent of the workers surveyed reporting that their employers were encouraging them to maintain six feet of distance when possible. The Centers for Disease Control and Prevention has listed indoor dining among the highest risk activities for the spread of the virus, and even though indoor dining didn’t resume in NYC until February 12, it has continued in the rest of the state prior to that. In addition, restaurant workers only became eligible to receive vaccinations in early February.

One Fair Wage [Official]

The restaurant industry has been devastated since the start of the COVID-19 pandemic. More than a 1,000 restaurants have closed in NYC, and hospitality industry insiders have predicted more closures without continued government aid and more long-term solutions for expenses like rent. In December alone, more than 11,000 restaurant and bar jobs disappeared, a 5.8 percent drop from the previous month. In the face of that continued uncertainty, workers surveyed in the One Fair Wage report say they felt like they had no choice but to return. With the continued safety risks and the decline in wages, however, four in 10 restaurant workers surveyed in NYC said they were considering leaving their jobs.

Plans to add surcharges to restaurant bills in NYC have been in the works for a few years, but legislators tied it to the drop in business due to the pandemic when it was approved by the New York City Council last fall. While groups like One Fair Wage aren’t opposed to the surcharge, per se, they asked that restaurants adopting the surcharge ensure that staffers are paid a $15 minimum wage excluding tips. With the industry facing historic losses, that request did not make it into the final piece of legislation.

Only seven states — including California, Oregon, and Washington, among others — ensure a full minimum wage for restaurant workers that does not include tips. Restaurant workers and advocates have campaigned for years to increase the minimum wage to $15 an hour. Gov. Andrew Cuomo moved to do so last year, but left out restaurant workers. As it stands right now, restaurants in New York City can pay tipped workers a $10 base pay with a $5 tip credit, which means that if restaurant workers don’t automatically make $15 an hour with tips, owners will be required to meet that difference so it reaches $15 an hour.

Some in the industry support the present system, including the NYC Hospitality Alliance, which represents thousands of restaurants owners in the city, and the Restaurant Workers of America. The Alliance has previously said that a full minimum wage would further decimate an industry already reeling from a historic financial crisis. Proponents of the full minimum wage like One Fair Wage have countered by saying that the present system perpetuates racial and gender disparities in the industry. President Joe Biden has proposed a federal $15 minimum wage as part of his coronavirus relief bill, but at least two Senate Democrats are opposed to it, leaving the passage of this particular measure uncertain.

Check out the full One Fair Wage report below: