STATE OF NEW YORK
________________________________________________________________________
3773
2015-2016 Regular Sessions
IN ASSEMBLY
January 27, 2015
___________
Introduced by M. of A. GOLDFEDER, MONTESANO, WEPRIN, COOK, CLARK, RYAN,
TITUS, AUBRY, SCARBOROUGH, LAVINE, BRAUNSTEIN -- Multi-Sponsored by --
M. of A. McDONALD, RA, SANTABARBARA -- read once and referred to the
Committee on Labor
AN ACT to amend the labor law, in relation to requiring notice from
employers to customers of service charges and administration fees that
are not distributed to employees as gratuities
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 196-d of the labor law, as added by chapter 1007 of
2 the laws of 1968, is amended to read as follows:
3 § 196-d. Gratuities. 1. An employer shall not be prohibited from
4 adding a mandatory gratuity as long as: (a) the charge is conspicuously
5 disclosed to the customer before food or beverage is ordered; and (b) no
6 employer or his agent or an officer or agent of any corporation, shall
7 retain any portion of such gratuity. The disclosure shall use ordinary
8 language readily understood and shall appear in a type size similar to
9 surrounding text.
10 2. No employer or his agent or an officer or agent of any corporation,
11 or any other person shall demand or accept, directly or indirectly, any
12 part of the gratuities, received by an employee, or retain any part of a
13 gratuity or of any charge purported to be a gratuity for an employee.
14 This provision shall not apply to the checking of hats, coats or other
15 apparel. Nothing in this subdivision shall be construed as affecting the
16 allowances from the minimum wage for gratuities in the amount determined
17 in accordance with the provisions of article nineteen of this chapter
18 nor as affecting practices in connection with banquets and other special
19 functions where a fixed percentage of the patron's bill is added for
20 gratuities which are distributed to employees, nor to the sharing of
21 tips by a waiter with a busboy or similar employee. An employer that
22 imposes a mandatory service charge, administrative fee, or any other
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06377-01-5
A. 3773 2
1 similar charge which is not distributed to employees as gratuities must
2 provide written notice to customers in the contract or agreement for
3 services and on the check or invoice that the charge is not a gratuity
4 and will not be distributed to employees who provided service to guests,
5 or if only a portion of the charge is distributed as gratuities, the
6 portion distributed as gratuities must be identified. The written
7 notice to customers in the contract or agreement for services shall
8 appear in a type size no smaller than twelve point type. The statements
9 in the check or invoice shall use ordinary language readily understood
10 and shall appear in a type size similar to surrounding text.
11 3. Notwithstanding the foregoing, there shall be no liability to any
12 action alleging that any service charge, administrative fee, or any
13 other similar charge imposed as part of a banquet held prior to January
14 first, two thousand thirteen was a gratuity, if the employer proves as
15 an affirmative defense that all of the following conditions were met:
16 (a) the employer or employer's agent did not expressly represent to the
17 customer that the charge was a gratuity; (b) the employer charged sales
18 tax in accordance with the applicable provisions of the tax law on the
19 charge; (c) the employer included the charge as part of its gross
20 receipts, upon which income tax was calculated; and (d) the employer
21 paid food service workers wages set forth in section six hundred fifty-
22 two of this chapter.
23 § 2. This act shall take effect immediately.
