Connecticut Seal

General Assembly

File No. 91

    January Session, 2017

House Bill No. 7085

House of Representatives, March 20, 2017

The Committee on Labor and Public Employees reported through REP. PORTER of the 94th Dist., Chairperson of the Committee on the part of the House, that the bill ought to pass.

AN ACT CONCERNING CREDIT CARD TRANSACTIONS AND GRATUITIES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 31-60 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):

(a) Any employer who pays or agrees to pay to an employee less than the minimum fair wage or overtime wage shall be deemed in violation of the provisions of this part.

(b) The Labor Commissioner shall adopt such regulations, in accordance with the provisions of chapter 54, as may be appropriate to carry out the purposes of this part. Such regulations may include, but are not limited to, regulations defining and governing an executive, administrative or professional employee and outside salesperson; learners and apprentices, their number, proportion and length of service; and piece rates in relation to time rates; and shall recognize, as part of the minimum fair wage, gratuities in an amount (1) equal to twenty-nine and three-tenths per cent, and effective January 1, 2009, equal to thirty-one per cent of the minimum fair wage per hour, and effective January 1, 2014, equal to thirty-four and six-tenths per cent of the minimum fair wage per hour, and effective January 1, 2015, equal to thirty-six and eight-tenths per cent of the minimum fair wage per hour for persons, other than bartenders, who are employed in the hotel and restaurant industry, including a hotel restaurant, who customarily and regularly receive gratuities, (2) equal to eight and two-tenths per cent, and effective January 1, 2009, equal to eleven per cent of the minimum fair wage per hour, and effective January 1, 2014, equal to fifteen and six-tenths per cent of the minimum fair wage per hour, and effective January 1, 2015, equal to eighteen and one-half per cent of the minimum fair wage per hour for persons employed as bartenders who customarily and regularly receive gratuities, and (3) not to exceed thirty-five cents per hour in any other industry, [and] except, if an employer imposes a surcharge on or reduces the gratuity paid to any employee through a credit card transaction, such gratuity shall not be recognized as part of the minimum fair wage. The commissioner shall also recognize deductions and allowances for the value of board, in the amount of eighty-five cents for a full meal and forty-five cents for a light meal, lodging, apparel or other items or services supplied by the employer; and other special conditions or circumstances which may be usual in a particular employer-employee relationship. The commissioner may provide, in such regulations, modifications of the minimum fair wage herein established for learners and apprentices; persons under the age of eighteen years; and for such special cases or classes of cases as the commissioner finds appropriate to prevent curtailment of employment opportunities, avoid undue hardship and safeguard the minimum fair wage herein established. Regulations in effect on July 1, 1973, providing for a board deduction and allowance in an amount differing from that provided in this section shall be construed to be amended consistent with this section.

(c) Regulations adopted by the commissioner pursuant to subsection (b) of this section which define executive, administrative and professional employees shall be updated not later than October 1, 2000, and every four years thereafter, to specify that such persons shall be compensated on a salary basis at a rate determined by the Labor Commissioner.

Sec. 2. (NEW) (Effective from passage) Any employer, who imposes a surcharge on or reduces the gratuity paid to any employee through a credit card transaction, shall post notice of such surcharge or reduction in a prominent place on the premises of such employer notifying the patrons of such employer of such surcharge or reduction.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2017

31-60

Sec. 2

from passage

New section

LAB

Joint Favorable

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.


OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

The bill, which excludes tips that have been adjusted based on credit card transaction fees from an employer's “tip credit” calculation towards minimum wage, does not result in a fiscal impact to the state or municipalities.

The Out Years

State Impact: None

Municipal Impact: None

OLR Bill Analysis

HB 7085

AN ACT CONCERNING CREDIT CARD TRANSACTIONS AND GRATUITIES.

SUMMARY

This bill prohibits employers from applying the “tip credit” to a tip paid to an employee through a credit card if the employer reduces the tip or imposes a surcharge on it. It also requires employers who reduce or impose a surcharge on credit card tips to post a notice notifying patrons about the practice in a prominent place on their premises.

By law, the tip credit allows employers to count their employees' tips as a portion of their minimum wage requirement. This reduces the employer's share of the minimum wage, as long as the tips make up the difference between the hourly wage paid and minimum wage.

EFFECTIVE DATE: the notice requirement is effective upon passage and the credit card tip credit provision is effective October 1, 2017.

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable

Yea

8

Nay

5

(03/02/2017)

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