An Act To Clarify the Use of Tips in Payment of Service Employees
Sec. 1. 26 MRSA §663, sub-§8, as enacted by PL 1967, c. 466, §4, is amended to read:
Sec. 2. 26 MRSA §664, sub-§2, as enacted by PL 1995, c. 305, §1, is amended to read:
The tips received by a service employee become the property of the employee and may not be shared with the employer. Service employees may volunteer to pool their tips to be split evenly among other service employees or may volunteer to share a part of their tips with other employees who do not generally receive tips directly from customers. Tips that are automatically included in the customer's bill or that are charged to a credit card must be given to the service employee, except that if the employer must pay the credit card company a percentage on each sale, the employer may deduct from the employee's tip a proportion of the credit card charge that is the same proportion that the tip is to the total bill. A tip that is charged to a credit card must be paid by the employer to the employee by the next regular payday and may not be held while the employer is awaiting reimbursement from a credit card company.
summary
This bill clarifies that tips belong to the employee providing direct service and that the entire tip, less a pro rated percentage, if any, charged by the credit card company, from any credit card payment must go to the employee. It allows the pooling of tips in limited circumstances. It also increases the threshold from $20 a month to $30 a month in tips in the expanded definition of service employee.