LA County Considers COVID-19 Recovery Charge

Ervin Cohen & Jessup LLP

Ervin Cohen & Jessup LLP

On October 27, 2020, the Los Angeles County Board of Supervisors approved a recommendation to consider allowing restaurants, breweries, and wineries to temporarily charge a “COVID-19 Recovery Charge” for on-site dining.  The motion was proposed by Supervisor Hilda L. Solis.

In the motion, Supervisor Solis stated: “The COVID-19 pandemic has affected the independent hospitality industry and its workers throughout the county. As of 2019, 8.8% of all workers in Los Angeles County worked in food service establishments & drinking places, employing 398,800 people. This industry employs a labor workforce that is dependent on jobs with low barriers to entry for their livelihood - with many from communities of color. Until full indoor dining is once again permitted, the independent hospitality industry is unlikely to generate the revenue they produced before COVID-19, and it is necessary for the Board to support this industry by temporarily allowing them to add a “COVID-19 Recovery Charge” to a customer’s total bill.”

Under the proposal, the charge would need to include disclosures to the customer that clearly identifies surcharge labeled “COVID-19 Recovery Charge” on the bill and clearly note and enumerate the use of such service charge on the menu.  Additionally, only independent restaurants would be permitted to make this charge. The proposal excludes franchises with more than five locations and chains.

The charge would terminate 90 days after full indoor dining is permitted in Los Angeles County. New York has permitted a similar surcharge for dine-in customers of up to 10%, and other cities are considering similar measures.

The Board of Supervisors will make a final determination about permitting the COVID-19 Recovery Charge during its November 24, 2020 meeting, after considering feedback from labor and business representatives. Public comments submitted to the Board by the Independent Hospitality Coalition, brewery owners, and restaurant owners was favorable to the motion, characterizing it as needed relief for small business owners.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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