2022 -- H 7510

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO LABOR AND LABOR RELATIONS - TIP PROTECTION

     

     Introduced By: Representatives Morales, Felix, Williams, Alzate, Kislak, Tanzi,
Speakman, Henries, Vella-Wilkinson, and McEntee

     Date Introduced: February 16, 2022

     Referred To: House Labor

     It is enacted by the General Assembly as follows:

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

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is hereby amended by adding thereto the following chapter:

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CHAPTER 14.1

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TIP PROTECTION

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     28-14.1-1. Definitions.

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     Whenever used in this chapter:

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     (1) "Employer" means any individual, firm, partnership, association, joint stock company,

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trust, corporation, receiver, or other like officer appointed by a court of this state, and any agent or

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officer of any of the previously mentioned classes, employing any person in this state.

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     (2) "Service charge" means a compulsory fee charged by an employer to a patron.

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     (3) "Tip" means voluntary monetary compensation received directly or indirectly by the

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employee for services rendered.

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     (4) "Tipped employee" means any employee engaged in an occupation in which the

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employee customarily and regularly receives more than thirty dollars ($30.00) a month in tips.

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     28-14.1-2. Restrictions on tip pooling.

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     (a) A tip is the sole property of the tipped employee. Any arrangement between the

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employer and the tipped employee whereby any part of the tip received becomes the property of

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the employer is prohibited.

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     (b) The requirement that an employee must retain all tips does not preclude a valid tip

 

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pooling or sharing arrangement among employees who customarily and regularly receive tips;

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provided, an employer must notify its employees of any required tip pool contribution amount, and

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may not retain any of the employees' tips for any other purpose, except as provided in § 28-14.1-4.

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     28-14.1-3. Service charges.

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     Service charges are part of the employer's gross receipts. Sums distributed to employees

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from service charges cannot be counted as tips received, but may be used to satisfy the employer's

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minimum wage and overtime requirements pursuant to the provisions of §§ 28-12-4.1 and 28-12-

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5. If an employee receives tips in addition to the compulsory service charge, those tips may be

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considered in determining whether the employee is a tipped employee and in the application of the

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tip credit.

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     28-14.1-4. Credit cards.

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     Where tips are charged on a credit card and the employer must pay the credit card company

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a percentage on each sale, the employer may deduct that percentage from the employee's tips,

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provided that the employer notifies the employee of the deduction. This charge on the tip may not

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reduce the employee's wage below the required minimum wage. The amount due to the employee

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must be paid no later than the regular pay day and may not be held while the employer is awaiting

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reimbursement from the credit card company.

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     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 - TIP PROTECTION

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     This act would prohibit employers from receiving any portion of the tips given by

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customers to their tipped employees, with limited exceptions for credit card service charges.

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     This act would take effect upon passage.

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