• New York City will become the first major U.S. city to require proof of vaccination to eat indoors, starting Monday.
• Restaurant operators will face a host of new challenges, like training and assigning their staff to enforce the mandate.
• The policy could also help restaurants keep their workforce healthy and make customers feel more comfortable dining indoors.

Starting Monday, New York City will become the first major U.S. city to impose a vaccination requirement for indoor dining, leaving restaurant operators across the five boroughs with a host of new challenges to tackle.

Prompted by the surge in new Covid-19 cases tied to the delta variant, the city is requiring proof of at least one vaccine dose for a number of indoor activities, including dining, fitness clubs and attending indoor performances in New York City, making it the first major U.S. city to impose such restrictions. Employees of those venues are also required to be vaccinated. Following a few weeks to transition, enforcement is slated to start Sept. 13.

The policy is gaining traction. On Thursday, San Francisco followed New York's lead, implementing its own vaccination requirement for indoor activities that will go into effect in Aug. 20. The California city's mandate differs slightly from New York's by requiring proof of full vaccination but allowing two months for employers to verify their workers' status. Los Angeles is considering a similar plan.

As more vaccine mandates come from localities and the eateries themselves, Booking Holdings' OpenTable has rolled out a feature that allows restaurants to display their Covid inoculation requirements to customers. The reservation service also plans to publish a national list of restaurants that require proof of vaccination.

Inevitably, New York's mandate will have a learning curve. But restaurants are also still waiting on more detailed guidance from city officials, like how much information they need to collect and record from customers.

"I feel like it's going to be a bit of a free-for-all come Monday, where customers and restaurants aren't really going to know what's happening with this," said Art Depole, who co-owns a Mooyah Burgers, Fries and Shakes franchise with his brother Nick in midtown Manhattan.

Chipotle Mexican Grill CEO Brian Niccol told the Washington Post on Wednesday that the the city should figure out how the vaccination requirement applies to people who can't be inoculated for medical or religious reasons. Otherwise, they'll be left out of the workforce.

Labor has been an ongoing challenge for the industry, which needs all the workers it can get. Restaurants have turned to raising wages and offering retention bonuses to attract new workers, but the unemployment rate for eating and drinking places was still 8.4% nationwide in July, according to the Bureau of Labor Statistics.

Depole said that more than half of his Mooyah employees are vaccinated. However, he's seeing vocal pushback from a handful of his unvaccinated workers, who are threatening to quit if the inoculation becomes a term of their employment. Enforcing the mandates also puts the burden on his staff, who would have to handle noncompliant customers.

And checking for proof of vaccination could also mean scheduling an extra worker just to stand by the door throughout the shift, adding to restaurants' rising labor costs. Chipotle is still figuring out how it will check for proof of vaccination.

"Obviously, it's something that is going to require some thinking if we want it to be truly executable," Niccol said.

Tourists present another difficulty in implementing the mandate. Depole's Mooyah restaurant is located between Times Square and Herald Square, two tourist hot spots, and those customers' orders are needed.

"It seems like more of the locals are on board and understand it, but the tourists and the out-of-towners say, 'Oh no, that's the last time you're going to see me in the city,'" Depole said. "It's a polarizing issue."

And although the number of international tourists isn't expected to rebound to pre-pandemic levels until 2025, some are still traveling to New York City. For those visiting from outside the U.S., some might find themselves struggling to get their proof of vaccination accepted.

For example, retail consultant and founder of SW Retail Advisors Stacey Widlitz received the Oxford-AstraZeneca vaccine in the United Kingdom. While the World Health Organization has approved the vaccine, Widlitz has faced difficulties getting some New York businesses to accept her proof of vaccination: a QR code generated by the National Health Service's mobile app.

"I'm not a tourist, but I had my vaccine in London, and they don't know what to do with a barcode from a foreign country on an app they don't recognize," Widlitz said. "They give you a blank stare."

So far, an Upper East Side gym has already told Widlitz that it would only accept the Moderna, Pfizer or Johnson & Johnson vaccines if she wanted to exercise without a mask. Workers at several independent restaurants told her she wouldn't be able to eat indoors once the mandate kicked in because they had no way to verify vaccinations that occurred outside of the United States.

But restaurant operators will also see some benefits from the vaccine mandate, besides stemming the tide of new Covid cases. For one, it could limit the number of workers that call out sick because they tested positive or came into contact with someone who did. Niccol, for example, told the Washington Post that the burrito chain is seeing more workers miss shifts due to the delta variant, although the burrito chain won't implement a company-wide vaccine mandate until the vaccines receive final approval from regulators.

The mandate could also encourage some consumers who have been reluctant to return to restaurants to dine indoors again. Le Bernadin chef Eric Ripert said Thursday on CNBC's "Worldwide Exchange" that his restaurant's existing vaccination policy has made customers feel relieved and safe, rather than alienating them.

"It's a very big difference between what we see on social media and the reality of what's happening with the business," he said.