| 47 | | - | SECTION 1. The legislature finds that food, beverage, and service establishments increasingly rely on customers tipping employees to earn a reasonable wage. However, the legislature further finds that a 2022 United States Department of Labor investigation discovered that employers in the State were illegally stealing tips that their employees had earned, resulting in the employers being required to pay $117,710 in back wages and liquidated damages for seventy workers. Another illegal tip theft investigation at a local cafe resulted in fourteen workers recovering a combined $79,000 in back wages and $79,000 in damages. The Hawaii Worker Rights Center estimates that for each illegal case of tip theft discovered, countless others likely continue, depriving local workers of their earnings. However, tip theft is often difficult to identify because tips are frequently split by employers between front and back of house employees without disclosing to both customers and employees how the tips are actually allocated. The legislature also finds that a simple and effective solution to prevent tip theft by employers is to inform tipping customers and workers receiving tips that it is illegal for employers to retain tips and clarify who to contact regarding suspected violations. Accordingly, the purpose of this Act is to require a clear and accessible notice of tip allocation in food, beverage, and service establishments. SECTION 2. Chapter 388, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§388- Tip allocation transparency; disclosure. (a) In addition to the notification requirements provided in section 388‑7, each food, beverage, and service establishment that accepts tips and employs an employee subject to title 29 Code of Federal Regulations section 531.50 et seq. or a tipped employee as defined in section 387-1, shall post: (1) A reasonably noticeable and easily readable sign with a simple and understandable explanation of how tips are allocated, which employee positions receive tips, and the percentages or proportions of tips allocated to each position in physical locations, including brick and mortar premises, mobile vehicle, or other temporary sites of business; at each point of customer check-in, check-out, final transaction; or an otherwise publicly visible location where customers are reasonably expected to pay for their purchase or service. The sign posted pursuant to this paragraph shall include one of the following statements or a substantially similar statement: (A) "Tips are kept entirely by each employee to whom they are left or given"; (B) "Tips are aggregated and divided equally among all employees legally allowed to receive tips from tip pools"; or (C) "Tips are aggregated and allocated as follows: one third is divided among all drivers; one third is divided among all servers; and one third is divided among all the kitchen staff"; and (2) A reasonably noticeable and easily readable sign with: (A) The same text in the sign posted pursuant to paragraph (1); and (B) The following statement or a substantially similar statement: "Federal and State laws require ALL tips received by this establishment to be directly distributed to employees. For questions or to report violations, contact the Wage and Hour Division of the U.S. Department of Labor at 1‑866-487-9243, or the Wage Standards Division of the Hawaii Department of Labor and Industrial Relations at: (i) 808-586-8777 for the city and county of Honolulu; (ii) 808-274-3351 for the county of Kauai; (iii) 808-984-2076 or 808-984-2075 for the county of Maui; and (iv) 808-974-6464 for the county of Hawaii.", in each physical location where other legally required notices for employees are posted. (b) In addition to the remedies available under section 388-11, any employer who fails or refuses to post a clear and accessible notice of the tip allocation required under this section shall be liable to the employee for back wages and penalties for back wages in the amount that the employee should have earned if all tips had been paid directly to the employee. (c) Action by an employee to recover unpaid wages, including back wages and unpaid tips, may be maintained in any court of competent jurisdiction by any one or more employees for and on behalf of oneself or themselves, or the employee or employees may designate an agent or representative to maintain the action. The court in any action brought under this section shall, in addition to any judgment awarded to the plaintiff or plaintiffs, award back wages in the amount that an employee should have earned if all tips had been paid directly to the employee by the employer." SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date. SECTION 4. New statutory material is underscored. SECTION 5. This Act shall take effect on July 1, 2050. |
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| 47 | + | SECTION 1. The legislature finds that food, beverage, and service establishments increasingly rely on customers tipping employees to earn a reasonable wage. However, the legislature further finds that a 2022 United States Department of Labor investigation discovered that employers in the State were illegally stealing tips that their employees had earned, resulting in the employers being required to pay $117,710 in back wages and liquid damages for seventy workers. Another illegal tip theft investigation at a local cafe resulted in fourteen workers recovering a combined $79,000 in back wages and $79,000 in damages. The Hawaii Worker Rights Center estimates that for each illegal case of tip theft discovered, countless others likely continue, depriving local workers of their earnings. However, tip theft is often difficult to identify because tips are frequently split by employers between front and back of house employees without disclosing to both customers and employees how the tips are actually allocated. The legislature also finds that a simple and effective solution to prevent tip theft by employers is to inform tipping customers and workers receiving tips that it is illegal for employers to retain tips and clarify who to contact regarding suspected violations. Accordingly, the purpose of this Act is to require a clear and accessible notice of tip allocation in food, beverage, and service establishments. SECTION 2. Chapter 481B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§481B- Tip allocation transparency; disclosure. Each food, beverage, and service establishment that accepts tips and employs an employee subject to title 29 Code of Federal Regulations section 531.50 et seq. or a tipped employee as defined in section 387-1, shall post: (1) A reasonably noticeable and easily readable sign with a simple and understandable explanation of how tips are allocated, which employee positions receive tips, and the percentages or proportions of tips allocated to each position in physical locations, including brick and mortar premises; mobile vehicle or other temporary sites of business; at each point of customer check-in, check-out, final transaction; or an otherwise publicly visible location where customers are reasonably expected to pay for their purchase or service. The sign posted pursuant to this paragraph shall include one of the following statements or a substantially similar statement: (A) "Tips are kept entirely by each employee to whom they are left or given"; (B) "Tips are aggregated and divided equally among all employees legally allowed to receive tips from tip pools"; or (C) "Tips are aggregated and allocated as follows: one third is divided among all drivers; one third is divided among all servers; and one third is divided among all the kitchen staff"; and (2) A reasonably noticeable and easily readable sign with: (A) The same text in the sign posted pursuant to paragraph (1); and (B) The following statement or a substantially similar statement: "Federal and State laws require ALL tips received by this establishment to be directly distributed to employees. For questions or to report violations, contact the Wage and Hour Division of the U.S. Department of Labor at 1‑866-487-9243, or the Wage Standards Division of the Hawaii Department of Labor and Industrial Relations at: (i) 808-586-8777 for the city and county of Honolulu; (ii) 808-274-3351 for the county of Kauai; (iii) 808-984-2076 or 808-984-2075 for the county of Maui; and (iv) 808-974-6464 for the county of Hawaii.", in each physical location where other legally required notices for employees are posted." SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date. SECTION 4. New statutory material is underscored. SECTION 5. This Act shall take effect on July 1, 2050. |
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