senate Bill S6299A

Amended

Requires notice from employers to customers of service charges and administrative fees that are not distributed to employees as gratuities

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 24 / Jan / 2012
    • REFERRED TO LABOR
  • 11 / Apr / 2012
    • AMEND AND RECOMMIT TO LABOR
  • 11 / Apr / 2012
    • PRINT NUMBER 6299A
  • 18 / Apr / 2012
    • 1ST REPORT CAL.530
  • 19 / Apr / 2012
    • 2ND REPORT CAL.
  • 25 / Apr / 2012
    • ADVANCED TO THIRD READING
  • 01 / May / 2012
    • AMENDED ON THIRD READING 6299B
  • 08 / May / 2012
    • PASSED SENATE
  • 08 / May / 2012
    • DELIVERED TO ASSEMBLY
  • 09 / May / 2012
    • REFERRED TO LABOR

Summary

Requires notice from employers to customers of service charges and administrative fees that are not distributed to employees as gratuities.

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Bill Details

Versions:
S6299
S6299A
S6299B
Legislative Cycle:
2011-2012
Current Committee:
Assembly Labor
Law Section:
Labor Law
Laws Affected:
Amd ยง196-d, Lab L

Votes

10
5
10
Aye
5
Nay
1
aye with reservations
0
absent
0
excused
0
abstained
show Labor committee vote details

Sponsor Memo

BILL NUMBER:S6299A

TITLE OF BILL:
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

PURPOSE OF BILL:
To codify the past practices of catering hall facilities based on
Department of Labor regulations for the imposition of service charges
prior to the Court of Appeals decision in Samineto v. World Yacht, Inc.

SUMMARY OF SPECIFIC PROVISIONS:
Amends section 196-d of the labor law, as added by chapter 1007 of the
laws of 1968 to explicitly state that written notice shall be given
to customers that mandatory service charges or any similar
administrative fee, are not part of a gratuity if that charge, or
only part of that charge is not to be distributed to any employees as
a gratuity. The statement shall be written in ordinary language in no
smaller than 12 point font. This bill will also remove any
retroactive liability for any fees administered prior to the
enactment of this bill that were not explicitly designated as service
charges not to be counted as gratuities in writing.

Section two sets the enacting date.

JUSTIFICATION:
The Court of Appeals held in Samineto v. World
Yacht, Inc., 10 N.Y.3d
70 (2008) that mandatory service charges may be a charge that is
purported to be a gratuity if the reasonable customer would
understand such a mandatory charge to be a gratuity. Prior to this
decision, owners of catering halls reasonably relied on a 1995
state-wide memorandum of the New York State Department of Labor
(consistent with federal law) and numerous subsequent Department
Opinion Letters, which confirmed that in the cases of banquets or
other special functions, a service charge would not be considered a
gratuity. The Samiento decision radically altered this paradigm and
subjected catering halls to significant retroactive liability,
despite their practice having been consistent with the regulations at
the time and in compliance with Department guidance and the holdings
of lower state and federal courts.

PRIOR LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
None to the state.

EFFECTIVE DATE:

This act shall take effect on the thirtieth day after
it shall have become a law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 6299--A

                            I N  S E N A T E

                            January 24, 2012
                               ___________

Introduced  by  Sen. MARTINS -- read twice and ordered printed, and when
  printed to be  committed  to  the  Committee  on  Labor  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

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:

  Section 1. Section 196-d of the labor law, as added by chapter 1007 of
the laws of 1968, is amended to read as follows:
  S  196-d.  Gratuities. No employer or his agent or an officer or agent
of any corporation, or any other person shall demand or accept, directly
or indirectly, any part of the gratuities, received by an  employee,  or
retain any part of a gratuity or of any charge purported to be a gratui-
ty  for  an  employee. This provision shall not apply to the checking of
hats, coats or other apparel.  Nothing  in  this  subdivision  shall  be
construed  as affecting the allowances from the minimum wage for gratui-
ties in the amount determined in accordance with the provisions of arti-
cle nineteen of this chapter nor as affecting  practices  in  connection
with  banquets  and  other special functions where a fixed percentage of
the patron's bill is added  for  gratuities  which  are  distributed  to
employees, nor to the sharing of tips by a waiter with a busboy or simi-
lar  employee.    AN  EMPLOYER  THAT IMPOSES A MANDATORY SERVICE CHARGE,
ADMINISTRATIVE FEE, OR ANY OTHER SIMILAR CHARGE WHICH IS NOT DISTRIBUTED
TO EMPLOYEES AS GRATUITIES MUST PROVIDE WRITTEN NOTICE TO  CUSTOMERS  ON
THE  CHECK  OR INVOICE THAT THE CHARGE IS NOT A GRATUITY AND WILL NOT BE
DISTRIBUTED TO EMPLOYEES WHO PROVIDED SERVICE TO GUESTS, OR  IF  ONLY  A
PORTION OF THE CHARGE IS DISTRIBUTED AS GRATUITIES, THE PORTION DISTRIB-
UTED AS GRATUITIES MUST BE IDENTIFIED. THE STATEMENTS SHALL USE ORDINARY
LANGUAGE  READILY  UNDERSTOOD AND SHALL APPEAR IN A TYPE SIZE SIMILAR TO
SURROUNDING TEXT, BUT NO SMALLER THAN TWELVE POINT TYPE.   NOTWITHSTAND-
ING  THE  FOREGOING,  PRIOR  TO THE EFFECTIVE DATE OF THIS SENTENCE, ANY
MANDATORY SERVICE  OR  ADMINISTRATIVE  CHARGE,  OR  ANY  MANDATORY  FEE,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14113-04-2

S. 6299--A                          2

IMPOSED  BY  AN  EMPLOYER  AS  PART  OF A BANQUET SERVING TWENTY OR MORE
GUESTS SHALL NOT BE DEEMED A GRATUITY OR CHARGE PURPORTED TO BE A GRATU-
ITY, AND SHALL NOT FORM THE BASIS OF ANY LIABILITY UNDER  THIS  SECTION,
ANY  OTHER  PROVISION  OF  THIS  CHAPTER  OR ANY REGULATIONS IMPLEMENTED
DESPITE THE ABSENCE OF SUCH DISCLOSURE OR AS A RESULT OF  ANY  REPRESEN-
TATION  MADE  BY ANY EMPLOYER OR HIS AGENT UNLESS SUCH MANDATORY SERVICE
OR ADMINISTRATIVE CHARGE, OR ANY MANDATORY FEE, WAS SPECIFICALLY REPRES-
ENTED IN WRITING TO BE A GRATUITY PAID TO  A  FOOD  SERVICE  WORKER,  AS
DEFINED  IN  12  N.Y.C.R.R.  146-3.4,  BY THE EMPLOYER OR HIS AGENT.   A
BANQUET IS AN OCCASION WHERE FOOD OR BEVERAGE IS SERVED.
  S 2. This act shall take effect on the thirtieth day  after  it  shall
have become a law.

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