NY A03773

Employers must disclose mandatory gratuities to customers before food or beverage is ordered using ordinary language in type size similar to surrounding text, and cannot retain any portion of the gratuity.

Employers that impose mandatory service charges, administrative fees, or similar charges not distributed to employees as gratuities must provide written notice to customers in the service contract and on the check or invoice clearly stating the charge is not a gratuity.

Written notice in service contracts must appear in no smaller than 12-point type, while statements on checks or invoices must use ordinary language in type size similar to surrounding text.

If only a portion of a charge is distributed as gratuities to employees, that portion must be clearly identified in the notice to customers.

Employers are protected from liability for banquet service charges imposed before January 1, 2013 if they can prove they did not represent the charge as a gratuity, charged sales tax on it, included it in gross receipts for income tax purposes, and paid workers the required food service wages.