S T A T E O F N E W Y O R K
________________________________________________________________________
3773
2015-2016 Regular Sessions
I N A S S E M B L Y
January 27, 2015
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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:
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: (A) THE CHARGE IS CONSPICUOUSLY
DISCLOSED TO THE CUSTOMER BEFORE FOOD OR BEVERAGE IS ORDERED; AND (B) 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
tips by a waiter with a busboy or similar employee. AN EMPLOYER THAT
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
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.
3. NOTWITHSTANDING THE FOREGOING, THERE SHALL BE NO LIABILITY TO ANY
ACTION ALLEGING THAT ANY SERVICE CHARGE, ADMINISTRATIVE FEE, OR ANY
OTHER SIMILAR CHARGE IMPOSED AS PART OF A BANQUET HELD PRIOR TO JANUARY
FIRST, TWO THOUSAND THIRTEEN WAS A GRATUITY, IF THE EMPLOYER PROVES AS
AN AFFIRMATIVE DEFENSE THAT ALL OF THE FOLLOWING CONDITIONS WERE MET:
(A) THE EMPLOYER OR EMPLOYER'S AGENT DID NOT EXPRESSLY REPRESENT TO THE
CUSTOMER THAT THE CHARGE WAS A GRATUITY; (B) THE EMPLOYER CHARGED SALES
TAX IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF THE TAX LAW ON THE
CHARGE; (C) THE EMPLOYER INCLUDED THE CHARGE AS PART OF ITS GROSS
RECEIPTS, UPON WHICH INCOME TAX WAS CALCULATED; AND (D) THE EMPLOYER
PAID FOOD SERVICE WORKERS WAGES SET FORTH IN SECTION SIX HUNDRED FIFTY-
TWO OF THIS CHAPTER.
S 2. This act shall take effect immediately.