S T A T E O F N E W Y O R K
________________________________________________________________________
9439--B
I N A S S E M B L Y
March 1, 2012
___________
Introduced by M. of A. GOLDFEDER, MONTESANO, MURRAY, LAVINE, SCHIMEL,
DenDEKKER, WEPRIN, MOYA, BRAUNSTEIN, WEISENBERG, SIMANOWITZ, COOK,
RYAN, CUSICK, BROOK-KRASNY, BRINDISI, ESPINAL, TITUS, CLARK, AUBRY,
SCARBOROUGH, M. MILLER, MAISEL, HEVESI -- Multi-Sponsored by -- M. of
A. FITZPATRICK, LOSQUADRO, McDONOUGH, NOLAN, RA, RAIA -- read once and
referred to the Committee on Labor -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- again reported from said committee with amendments, 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. 1. AN EMPLOYER SHALL NOT BE PROHIBITED FROM
ADDING A MANDATORY GRATUITY AS LONG AS: (I) THE CHARGE IS CONSPICUOUSLY
DISCLOSED TO THE CUSTOMER BEFORE FOOD OR BEVERAGE IS ORDERED; AND (II)
NO EMPLOYER OR HIS AGENT OR AN OFFICER OR AGENT OF ANY CORPORATION,
SHALL RETAIN ANY PORTION OF SUCH GRATUITY. THE DISCLOSURE SHALL USE
ORDINARY LANGUAGE READILY UNDERSTOOD AND SHALL APPEAR IN A TYPE SIZE
SIMILAR TO SURROUNDING TEXT.
2. 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 gratuity 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 gratuities in the amount determined
in accordance with the provisions of article 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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14113-08-2
A. 9439--B 2
tips by a waiter with a busboy or similar 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 IN THE CONTRACT OR AGREEMENT FOR
SERVICES AND 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 DISTRIBUTED AS GRATUITIES MUST BE IDENTIFIED. THE WRITTEN
NOTICE TO CUSTOMERS IN THE CONTRACT OR AGREEMENT FOR SERVICES SHALL
APPEAR IN A TYPE SIZE NO SMALLER THAN TWELVE POINT TYPE. THE STATEMENTS
IN THE CHECK OR INVOICE SHALL USE ORDINARY LANGUAGE READILY UNDERSTOOD
AND SHALL APPEAR IN A TYPE SIZE SIMILAR TO SURROUNDING TEXT. NOTWITH-
STANDING THE FOREGOING, PRIOR TO THE EFFECTIVE DATE OF A CHAPTER OF THE
LAWS OF TWO THOUSAND TWELVE THAT AMENDED THIS SECTION, ANY MANDATORY
SERVICE OR ADMINISTRATIVE CHARGE, OR ANY MANDATORY FEE, 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 GRATUITY, AND SHALL NOT
FORM THE BASIS OF ANY LIABILITY UNDER THIS SECTION, ANY OTHER PROVISION
OF THIS CHAPTER OR ANY REGULATIONS IMPLEMENTED PURSUANT TO THIS CHAPTER
DESPITE THE ABSENCE OF SUCH DISCLOSURE OR AS A RESULT OF ANY REPRESEN-
TATION MADE BY ANY EMPLOYER OR HIS AGENT PROVIDED SUCH MANDATORY SERVICE
OR ADMINISTRATIVE CHARGE, OR ANY MANDATORY FEE, WAS NOT SPECIFICALLY
REPRESENTED TO A CUSTOMER OR EMPLOYEE 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, THE EMPLOYER CHARGED SALES TAX IN ACCORDANCE WITH
THE APPLICABLE PROVISIONS OF THE NEW YORK TAX LAW ON THE MANDATORY
SERVICE OR ADMINISTRATIVE CHARGE, OR MANDATORY FEE, THE EMPLOYER
INCLUDED THE SERVICE OR ADMINISTRATIVE CHARGE OR MANDATORY FEE AS PART
OF ITS GROSS RECEIPTS, UPON WHICH INCOME TAX WAS CALCULATED, AND FOOD
SERVICE WORKERS EMPLOYED BY THE EMPLOYER AT THE BANQUET RECEIVED A REGU-
LAR RATE OF PAY EQUAL TO OR EXCEEDING THE MINIMUM WAGE SET FORTH IN THE
LABOR LAW.
S 2. This act shall take effect on the thirtieth day after it shall
have become a law.