Assembly Bill A5388

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5388
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 13, 2025
                                ___________
 
 Introduced  by M. of A. VANEL -- read once and referred to the Committee
   on Consumer Affairs and Protection
 
 AN ACT to amend the general business law,  in  relation  to  prohibiting
   deceptive gratuity solicitations
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. The general business law is amended by adding a new section
 349-h to read as follows:
   § 349-H. DECEPTIVE GRATUITY SOLICITATIONS. 1. DEFINITIONS. AS USED  IN
 THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A)  "POINT-OF-SALE  TERMINAL" SHALL MEAN AN ELECTRONIC DEVICE THROUGH
 WHICH A CONSUMER MAY INITIATE PAYMENT TRANSACTIONS.
   (B) "ESTABLISHMENT" SHALL MEAN A PLACE OF BUSINESS THAT IS OPEN TO THE
 PUBLIC IN THE STATE OF NEW YORK.
   (C) "AUTOMATIC GRATUITY" SHALL MEAN A GRATUITY THAT IS CHARGED TO  THE
 CONSUMER'S  BILL  AUTOMATICALLY  AND  WITHOUT  FURTHER  ACTION  FROM THE
 CONSUMER, REGARDLESS OF THE CONSUMERS ABILITY TO REDUCE OR INCREASE SUCH
 GRATUITY.
   2. DECEPTIVE GRATUITIES. IT SHALL BE UNLAWFUL TO SOLICIT A GRATUITY IN
 A DECEPTIVE MANNER. A GRATUITY IS DEEMED TO HAVE  BEEN  SOLICITED  IN  A
 DECEPTIVE MANNER WHERE:
   (A)  A  SUGGESTED  PERCENTAGE OR AN AUTOMATIC GRATUITY IS PROVIDED AND
 SUCH DOLLAR AMOUNT THAT IS COMMUNICATED TO THE CONSUMER THAT IS  REPRES-
 ENTED BY SUCH PERCENTAGE OR AUTOMATIC GRATUITY IS INACCURATE;
   (B)  A  SUGGESTED  PERCENTAGE OR AN AUTOMATIC GRATUITY IS PROVIDED AND
 SUCH PERCENTAGE IS CALCULATED FROM THE TOTAL AMOUNT OWED  INCLUDING  TAX
 OR ANY OTHER FEES THAT THE ESTABLISHMENT MAY IMPOSE;
   (C) OTHER THAN SITUATIONS WHERE AN AUTOMATIC GRATUITY IS PROVIDED, THE
 ABILITY  TO  ADD  NO GRATUITY IS NOT PRESENTED AS A PROMINENT AND EASILY
 SELECTABLE INDIVIDUAL OPTION;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08426-01-5
 A. 5388                             2
              

 
   (D) A SUGGESTED PERCENTAGE IS PROVIDED  AND  LACKS  THE  CORRESPONDING
 DOLLAR  AMOUNT,  OR  A SUGGESTED DOLLAR AMOUNT IS PROVIDED AND LACKS THE
 CORRESPONDING PERCENTAGE, WITHOUT SUCH CORRESPONDING  DOLLAR  AMOUNT  OR
 PERCENTAGE  BEING  CONSPICUOUSLY  DISCLOSED  IN  CLOSE  PROXIMITY TO ITS
 CORRESPONDING SUGGESTED PERCENTAGE OR DOLLAR AMOUNT; OR
   (E)  THE SOLICITATION IS PRESENTED OR FUNCTIONS IN A MANNER PROSCRIBED
 BY RULES AND REGULATIONS PROMULGATED BY THE ATTORNEY GENERAL.
   3. MANUFACTURER'S  DUTIES  AND  LIABILITY.  A  MANUFACTURER,  SOFTWARE
 PROVIDER, OR ANY ENTITY RESPONSIBLE FOR DEVELOPING OR PROVIDING SOFTWARE
 FOR POINT-OF-SALE TERMINALS:
   (A)  SHALL  ENSURE THAT ALL TERMINALS SOLD AFTER THE EFFECTIVE DATE OF
 THIS SECTION DO NOT INCLUDE OR HAVE IMPLEMENTED ANY DESIGN OR  FUNCTION,
 OR  ANY ABILITY FOR AN ESTABLISHMENT TO ADD A DESIGN OR FUNCTION, WITHIN
 A POINT-OF-SALE TERMINAL THAT VIOLATES THIS SECTION; AND
   (B) WHICH HAS THE ABILITY TO  FURNISH  SOFTWARE  UPDATES  TO  EXISTING
 POINT-OF-SALE  TERMINALS  SHALL  UPDATE  SUCH  TERMINALS  TO EXCLUDE ANY
 PROHIBITED DESIGNS OR FUNCTIONS THAT VIOLATE THIS SECTION BY THE  EFFEC-
 TIVE  DATE  OF  THIS  SECTION OR, AT SUCH TIME WHEN THE ATTORNEY GENERAL
 PROSCRIBES ADDITIONAL DECEPTIVE DESIGNS OR FUNCTIONS, THAT  SUCH  TERMI-
 NALS  EXCLUDE  ANY SUCH PROHIBITED DESIGNS OR FUNCTIONS WITHIN A REASON-
 ABLE PERIOD OF TIME AS PRESCRIBED BY THE ATTORNEY GENERAL.
   4. ESTABLISHMENT'S DUTIES AND LIABILITY. AN ESTABLISHMENT:
   (A) SHALL NOT SOLICIT A GRATUITY IN A DECEPTIVE MANNER IN VIOLATION OF
 SUBDIVISION TWO OF THIS SECTION;
   (B) THAT HAS A NON-COMPLIANT POINT-OF-SALE TERMINAL IN USE SHALL BRING
 SUCH TERMINAL INTO COMPLIANCE WITH THIS SECTION BY THE EFFECTIVE DATE OF
 THIS SECTION. WHERE SUCH TERMINAL CANNOT BE BROUGHT INTO COMPLIANCE WITH
 THIS SECTION BECAUSE THE POINT-OF-SALE TERMINAL  DOES  NOT  PROVIDE  THE
 OPTIONS  TO BECOME COMPLIANT AS PROVIDED BY THIS SECTION, THE ESTABLISH-
 MENT SHALL NOT BE LIABLE FOR FAILING TO BRING THE POINT-OF-SALE TERMINAL
 INTO COMPLIANCE. WHERE THE MANUFACTURER, SOFTWARE  PROVIDER,  OR  ENTITY
 RESPONSIBLE  FOR  THE POINT-OF-SALE SYSTEM UPDATES THE SYSTEM TO PROVIDE
 THE OPTIONS TO BRING THE POINT-OF-SALE  TERMINAL  INTO  COMPLIANCE,  THE
 ESTABLISHMENT  SHALL BRING THE TERMINAL INTO COMPLIANCE BY THE EFFECTIVE
 DATE OF THIS SECTION. WHERE THE UPDATES TO  THE  POINT-OF-SALE  TERMINAL
 ARE  PROVIDED  WITHIN  SIXTY DAYS OF THE EFFECTIVE DATE OF THIS SECTION,
 THE ESTABLISHMENT SHALL HAVE AN  ADDITIONAL  SIXTY  DAYS  TO  BRING  THE
 POINT-OF-SALE  TERMINAL  INTO COMPLIANCE. AT SUCH TIME WHEN THE ATTORNEY
 GENERAL PROSCRIBES ADDITIONAL DECEPTIVE DESIGNS OR FUNCTIONS, AN  ESTAB-
 LISHMENT  SHALL  EXCLUDE ANY SUCH PROHIBITED DESIGNS OR FUNCTIONS WITHIN
 THEIR TERMINAL WITHIN A REASONABLE PERIOD OF TIME AS PRESCRIBED  BY  THE
 ATTORNEY GENERAL; AND
   (C)  THAT MANUFACTURES OR DESIGNS ITS OWN POINT-OF-SALE TERMINAL SHALL
 HAVE THE SAME  RESPONSIBILITIES  AND  LIABILITY  AS  A  MANUFACTURER  AS
 PROVIDED BY SUBDIVISION THREE OF THIS SECTION.
   §  2. This act shall take effect one year after it shall have become a
 law. Effective immediately, the addition, amendment and/or repeal of any
 rule or regulation necessary for the implementation of this act  on  its
 effective date are authorized to be made and completed on or before such
 effective date.