Introduction
20 Policy Ideas for 2020,
NYC Hospitality Industry Edition.
The New York City Hospitality Alliance presents 20 ideas
to preserve and protect the hospitality industry.
With 24,000+ restaurants and nightlife
establishments, the NYC hospitality industry
employs more than a quarter of a million people.
This industry is vital to the economic footprint
and social fabric of New York. It creates an
entry point into the workforce, provides upward
mobility, and offers careers to people of diverse
backgrounds. Our restaurants and nightlife
are a driving factor of why people want to live,
work and visit New York City.
Hospitality businesses, however, are facing
perilous times. In an industry that is known for
its low margins, high failure rates, government
overregulation, intense market forces and tough
competition, these small businesses are under
intense financial and operational pressure. We
must work collectively to address the plight
of small businesses and vacant storefronts in
New York City. As we enter this new decade,
we need a comprehensive plan to support the
hospitality industry and reverse these negative
trends. This is why the New York City Hospitality
Alliance presents: 20 Policy Ideas for 2020,
NYC Hospitality Industry Edition.
Enclosed you will find a menu of 20 progressive
policy ideas that will support our neighbor-
hoods’ restaurants and nightlife venues and
the people they employ. This menu is
segmented by: New York City & New York
State, New York City, and New York State
respectively. Please select policies from the
menu that you support. Let’s work together
to keep New York City the hospitality capital
of the world, and the city that never sleeps!
Please contact Andrew Rigie at
212-582-2506 or arigie@thenycalliance.org
with questions/comments.
Menu

New York City&New York State

Cut the Red Tape & Reduce Fines 100
Worker Benefit Programs 200
Data Ownership 300
Taxes (miscellaneous) 400
third-party Fees & consumer disclosure 500

New yorkCity
Commercial Rent Tax & Property Tax 600
Health Department Letter Grades 700
Sidewalk Cafes 800
Scaffolding 900
Surcharges 1000
Rent 1100
DEP Water Shutdowns 1200
Office of Nightlife 1300
Agent of Change 1400
Dancing 1500
Community Boards 1600

New yorkState
80/20 Rule 1700
Tip Sharing 1800
Enhanced Security Guard Training 1900
200 Foot Law 2000
New York City&New York State

Cut the Red Tape & Reduce Fines 100

Review all laws and regulations governing restaurants and nightlife establishments to determine
which are antiquated, duplicative or inappropriate. We should then amend or repeal the identified
mandates with the purpose of streamlining the permit and licensing process and enhancing the
experience businesses have when interacting with government. This should include a requirement
that inspectors educate businesses first, by explaining why a violation exists and how to correct
and prevent it. The goal should be to reduce fines, increase education and compliance, and
provide a warning or cure period before a fine is levied for any violations that do not pose an
imminent hazard to the public.

Worker Benefit Programs 200

Pass a law requiring that prior to any employer-funded and administrative mandates are introduced,
such as healthcare, paid vacation, etc., a diverse stakeholder committee be created to determine
the feasibility of providing such benefits via an insurance fund and/or government administered
and funded mechanism. This approach is similar to how social security, paid family leave and other
benefit programs are administered. In today’s changing marketplace, small employers in particular,
should not fully shoulder the burden of these social benefit programs. There are also many advantages
to workers when their benefits are portable and not tied to a specific employer.

Data Ownership 300

In today’s digital world, data is a valuable asset for businesses. Unfortunately, some third-party
companies, such as certain delivery and reservation platforms used by restaurants and nightlife
establishments do not provide these establishments with their own customer data and/or they
restrict how it is used. Pass a law providing businesses ownership of their customer data (and
related analytics) that is collected by third-party companies.

Taxes (miscellaneous) 400

The tax code is used to support and incentivize economic and pro-growth activity. Benefits
such as the Excelsior Jobs Tax Credit should be extended to employers in the hospitality
industry. Restaurants that purchase certain amounts of product from New York farmers and/or
food & beverage manufacturers should be offered incentives to encourage NYS commerce and
jobs. The City and State Finance Departments should permit the FICA Tip Tax Credit to be an
allowable subtraction from that business’ taxable income. Eliminate the unfair liquor excise tax
imposed by the City on all local liquor license holders.

Third-party Fees & consumer disclosure 500

In today’s marketplace, hospitality businesses rely on third-party companies to transact all kinds of
business, from delivering food to booking reservations. These third-party companies often charge
hefty fees to such businesses, which are debited from customers’ orders, something customers
never see. Enact a law providing businesses the option of disclosing the third-party fee and
passing it on to customers.
 New yorkCity
Commercial Rent Tax & Property Tax 600
NYC should begin the process of eliminating the unjust Commercial Rent Tax (CRT), which is
effectively a 3.9% surcharge that only businesses located south of 96th Street in Manhattan pay
on their annual rent when it exceeds a given threshold. This tax is discriminatory as it only applies
to businesses in a certain area of Manhattan with the highest rents, and is calculated on the rent,
not income. CRT has already been repealed citywide, except in this one geographic area. Most
commercial tenants pay a portion of their landlord’s property taxes, in addition to their rent. These
taxes pose a significant financial burden on small businesses. Provide small businesses with a tax
credit against a portion of the property taxes they pay.

Health Department Letter Grades 700

Amend the NYC Department of Health’s Letter Grade inspection system by allowing cure periods
for minor violations and eliminating points for non-food safety related violations that calculate
a letter grade. Also, introduce “due process” into the inspection system so that a judge’s ruling
determines the frequency of inspection, instead of an inspector’s accusations, which is how the
unfair system currently works.

Sidewalk Cafes 800

When a person purchases a business with an existing unenclosed sidewalk cafe, they should
be permitted to operate that cafe under the prior owner’s conditions until they are able to
apply for and receive their own cafe license. This will decrease the business’ startup costs and
provide much needed revenue to a new business because they would operate the sidewalk cafe
immediately (and not lose a season’s worth of business). A temporary license to operate should
also be available to restaurants looking to open in a currently vacant space that previously had
an approved sidewalk cafe license as long as the same cafe license is being requested. Other
cafe reforms should also be adopted to make the process faster and less expensive. For example,
all government agency reviews should take place at the same time, not one after the other, and
policies should be adopted to make the process faster and less expensive. Lastly, businesses
should not have to hire an architect just to submit a simple cafe plan. Any accurate plan should
suffice as they do with other commercial uses of the public sidewalk.

Scaffolding 900
Scaffolding (sidewalk sheds) are essential in protecting people from building construction, etc.
However, it is no secret that scaffolding left up for an extended period has a devastating impact
on restaurants and bars. The effects range from a significant loss of business, to the reduction of
employee hours and layoffs, to a major factor in some businesses closing. Some small business owners
even suspect that unscrupulous landlords have kept up scaffolding as a means to drive them
out of business in order to get a higher rent-paying tenant or for them to sell or demolish the
building. A law must be passed to require more aesthetically pleasing scaffolding and
forbiding it from staying up for unnecessarily long periods of time, without significant penalties.
Tenants must also have a private right of action to recoup money in appropriate circumstances.

Surcharges 1000
Allow hospitality business in NYC the option of adding a clearly disclosed surcharge to restaurant
menus. A disclosed surcharge is allowed everywhere in the country, even elsewhere in New York
State. This antiquated rule, implemented for an unrelated reason over 40 years ago by the NYC
Department of Consumer Affairs, can be interpreted to prohibit this practice. The surcharge works
successfully in other progressive cities like San Francisco as a way for local businesses to generate
revenue to cover skyrocketing operating costs. It is also a way to reduce wage disparity between
the front of house workers who earn big money in tips, and kitchen workers who cannot legally
particpate in a tip pool.
 New yorkCity

Rent 1100
Similar to the way cities negotiate deals with real estate developers to provide affordable housing
in new developments, deals must also include affordable commercial space for small businesses.
Existing developments that seek taxpayer subsidies could also have such requirements as a
condition of the benefit.

DEP Water Shutdowns 1200

The NYC Department of Environmental Protection (DEP) must provide businesses with sufficient
time, such as 30-day notice (or the longest notice period possible), prior to scheduled water
shutdowns. Restaurants sometimes receive less than 24-hours notice, and in some cases only
a few hours notice before a prescheduled, non-emergency water shutdown. Without working
water, restaurants and nightlife establishments and workers suffer significant loss of income and
their customers suffer when their reservations and events are cancelled last minute.

Office of Nightlife 1300

Increase the budget and staffing of the Office of Nightlife so it can effectively fulfill its mandate,
which will allow it to provide greater support to nightlife businesses, residents and other stake-
holders. Direct persistent nightlife establishment conflicts to the Office of Nightlife so they can
mediate situations, instead of immediately involving the NYPD (or other agencies) for enforcement
purposes where non-imminent safety matters occur.

Agent of Change 1400

This proposal places the responsibility on the party entering the community to take action to
mitigate/eliminate potential conflicts that may arise between businesses and residents, such as
requiring a new residential developer to pay for the soundproofing of an existing nightclub next
door.

Dancing 1500
Now that NYC repealed the Cabaret Law, the City must create a panel of expert stakeholders to
conduct a citywide review of the Zoning Resolution, and submit recommendations to the Mayor
and City Council, for additional areas where dancing should be permitted.

Community Boards 1600

Standardize the process to apply for and renew liquor licenses and sidewalk cafe permits across
community boards. The expectations of applicants should be clearly defined and community
board specific policies should be made available. Community boards should also identify
locations where late-night hours for nightlife establishments are appropriate in their respective
districts and provide applicants with constructive guidance so that stakeholders’ time is not
wasted.
New york State

80/20 Rule 1700

Reform the NYS Department of Labor’s so-called 80/20 Rule that creates significant legal and
financial liability for restaurants and hurts workers who want to work more hours and gain more
skills. The law prohibits an employer from taking the tip credit for an employee if they work more
than 20% or two hours of their shift in a non-tipped job capacity. Effectively this means employees
are prohibited from working five hours of a shift as a bartender earning tips and then three hours
doing inventory, tastings and purchasing, which is non-tipped work. If they do, they violate the
80/20 Rule and enormous financial liability results for the employer, including loss of the tip
credit, double damages and attorney fees. The 80/20 Rule also prevents the employee from
earning more money and gaining additional skill sets, thus limiting their income and opportunity
for professional growth. The 80/20 Rule must be amended to provide employees more flexibility
to work in a tipped and non-tipped capacity during the same shift.

Tip Sharing 1800

NYS law prohibits kitchen workers from participating in a restaurant’s tip pool. This results in
a growing disparity of income and can breed animosity between kitchen workers and servers
(bartenders, bussers, runners) who often earn significantly more money than their colleagues in
the kitchen because they earn tips. Amend the law to allow non-managerial kitchen workers (if
the employer chooses to) to participate in a restaurant’s tip pool, which is allowed in other states
around the country.

Enhanced Security Guard Training 1900

Under NYS law, security guards are required to take the same training whether they are guarding
a nightlife establishment or a pharmacy. Require security guards working in nightlife to receive
enhanced training tailored for their work environment including de-escalation techniques related
to intoxicated individuals, addressing sexual violence, harm reduction, active shooter, gender
identity, etc.

200 Foot Law 2000

Amend the State Liquor Authority’s post-prohibition law preventing a full-service restaurant from
obtaining a liquor license if they are located within 200 feet from a school or place of worship. This
would allow for economic development, increased jobs and additional local restaurants to open
where they’re now unable.