2014 -- H 7336

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LC003502

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO LABOR AND LABOR RELATIONS

     Introduced By: Representatives Blazejewski, Kazarian, Cimini, Ajello, and Handy

     Date Introduced: February 06, 2014

     Referred To: House Labor

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 28 of the General Laws entitled "LABOR AND LABOR

RELATIONS" is hereby amended by adding thereto the following chapter:

CHAPTER 14.1

PREVENTION OF TIPPING FRAUD

     28-14.1-1. Legislative purpose. – The general assembly declares that the purpose of this

chapter is to prohibit employers from demanding payment or deductions from a tip or service

charge to waitstaff, regular tip pools, and require that any service charge imposed by an employer

be remitted to the service staff. No employer or person shall contract with an employee or by any

other means exempt itself from this chapter.

     28-14.1-2. Definitions. – Whenever used in this chapter:

     (1) “Employer” means any person or entity engaged in any business or enterprise in this

state that has employees in its service, including, without limitation, any appointment, contract of

hire or apprenticeship, expressed or implied, oral or written, irrespective of whether the person is

the owner of the business or is operating on a concessionaire or other basis, and also including,

without limitation, any person other than the employer having the authority to hire or discharge

any employee or supervise, direct or control the acts of employees.

     (2) “Patron” means any person who is served by a waitstaff employee or service

employee at any place where such employees perform work, including, but not limited to, any

restaurant, banquet facility or other place at which prepared food and/or beverages are served, or

any person who pays a tip or service charge to any waitstaff employee, service employee or

service bartender.

     (3) “Service bartender” means a person who prepares alcoholic or nonalcoholic

beverages for patrons to be served by another employee, such as a waitstaff employee.

     (4) “Service charge” means a fee charged by an employer to a patron in lieu of a tip to

any waitstaff employee, service employee or service bartender, including any fee designated as a

service charge, tip, gratuity or a fee that a patron or other consumer would reasonably expect to

be given to a waitstaff employee, service employee or service bartender in lieu of, or in addition

to, a tip.

     (5) “Service employee” means a person who works in an occupation in which employees

customarily receive tips or gratuities, and who provides service directly to customers or

consumers, but who works in an occupation other than in food or beverage service and who has

no managerial responsibility.

     (6) “Tip” means a sum of money, including any amount designated by a credit card

patron, a gift or a gratuity, given as an acknowledgment of any service performed by a waitstaff

employee, service employee or service bartender.

     (7) “Waitstaff employee” means a person, including a waiter, waitress, bus person, and

counter staff, who: (i) Serves beverages or prepared food directly to patrons or who clears

patrons’ tables; (ii) Works in a restaurant, banquet facility or other place where prepared food or

beverages are served; and (iii) Who has no managerial responsibility.

     28-14.1-3. Prohibition on payment or deduction from tip. – No employer or other

person shall demand, request or accept from any waitstaff employee, service employee or service

bartender any payment or deduction from a tip or service charge given to such waitstaff

employee, service employee or service bartender by a patron. An employer that permits patrons to

pay tips or service charges by credit card shall pay the employee the full amount of the tip or

service charge that the patron indicated on the credit card slip. No such employer or other person

shall retain or distribute in a manner inconsistent with this chapter any tip or service charge given

directly to the employer or person.

     28-14.1-4. Prohibition against tip pools. – No employer or person shall cause, require

or permit any waitstaff employee, service employee or service bartender to participate in a tip

pool through which such employee remits any wage, tip or service charge or any portion thereof,

for distribution to any person who is not a waitstaff employee, service employee or service

bartender. An employer may administer a valid tip pool and may keep a record of the amounts

received for bookkeeping or tax reporting purposes.

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     28-14.1-5. Service charges and tips. – (a) If an employer or person submits a bill,

invoice or charge to a patron or other person that imposes a service charge or tip, the total

proceeds of that service charge or tip shall be remitted only to the waitstaff employees, service

employees or service bartenders in proportion to the service provided by those employees.

     (b) Nothing in this section shall prohibit an employer from imposing on a patron any

house or administrative fee in addition to or instead of a service charge or tip, if the employer

provides a designation or written description of that house or administrative fee, which informs

the patron that the fee does not represent a tip or service charge for waitstaff employees, service

employees or service bartenders

     (c) Any service charge or tip remitted by a patron or person to an employer shall be paid

to the waitstaff employee, service employee, or service bartender by the end of the same business

day, and in no case later than the time set forth for timely payment of wages under chapter 28-14-

2.2.

     28-14.1-6. Violation and penalties. – (a) Whoever violates this chapter shall be guilty of

a misdemeanor punishable by a fine not exceeding one thousand dollars ($1,000) or by

imprisonment for not exceeding sixty (60) days, or both. Any person or employer who violates

this chapter shall make restitution for any tips accepted, distributed or retained in violation of this

chapter, together with interest thereon at the rate of twelve percent (12%) per annum.

     (b) An employee claiming to be aggrieved under this section may, within three (3) years

after the violation, institute and prosecute in his or her own name and on his or her own behalf, or

for himself or herself and for others similarly situated, a civil action for injunctive relief, for any

damages incurred and for any lost wages and other benefits. An employee so aggrieved who

prevails in such an action shall be awarded treble damages, as liquidated damages, for any lost

wages and other benefits and shall also be awarded the costs of the litigation and reasonable

attorneys’ fees.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO LABOR AND LABOR RELATIONS

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     This act would seek to prohibit employers from demanding payment or deductions from a

tip or service charge given to waitstaff, prohibiting tip pools and would require that any service

charge imposed by an employer be remitted to the service staff.

     This act would take effect upon passage.

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