A popular restaurant in Manhattan has decided to discontinue a 2-percent surcharge added to bills after customers began questioning the additional cost.
W. Glenn Viers, vice president at Hillstone, which has two locations in Manhattan, told NBC 4 New York Tuesday the surcharge would be dropped, one day after NBC 4 New York looked into it. A customer had noticed the surcharge on a bill at the restaurant on the East Side and sent over the receipt.
Viers had initially said the restaurant didn't want to "hide these increased operational costs in our menu prices such that our guests might then question the value of what we offer."
It wasn't clear if Hillstone planned to raise menu prices after dropping the surcharge.
On Monday, the Department of Consumer Affairs said the surcharge is illegal in New York City.
Restaurant labor expert and attorney Carolyn Richmond said the surcharge appears to be an attempt to offset rising restaurant costs, especially now that the minimum wage has gone up and employees are required to get health care.
Other restaurants are adding similar surcharges, and the practice is legal almost everywhere else and is common in places like Los Angeles, San Francisco and Miami.
In New York, however, "it violates the city law," Richmond said. "You're at risk of a $500 per plate fine. But the problem is DCA hasn't really been enforcing the rule, absent a direct consumer complaint."
Marc Murphy, who owns the Landmarc restaurants, has not put a surcharge on the menus, but said restaurant owners are having a tough time adjusting to the new laws.
"You have to turn every stone over to see where you can save and where you can make ends meet," said Murphy.
Hillstone also has locations on Long Island and in at least a dozen other states.