SB 2660: Restaurants; Mandatory Gratuity Service Charge; Party Size; Limit; Notification

A BILL FOR AN ACT

relating to service charges.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 481B-14, Hawaii Revised Statutes, is amended to read as follows:

     "§481B-14  Hotel or restaurant service charge; hotel porterage service charge; disposition[.]; party size; limits.  (a)  Any:

     (1)  Hotel or restaurant that applies a service charge for the sale of food or beverage services; or

     (2)  Hotel that applies a service charge for porterage services[;],

shall distribute the service charge directly to its employees as tip income or clearly disclose to the purchaser of the services that the service charge is being used to pay for costs or expenses other than wages and tips of employees.

     (b)  No restaurant shall impose a mandatory gratuity service charge for food or beverage services on a party unless:

     (1)  The party includes ten or more customers;

     (2)  The mandatory gratuity service charge does not exceed eighteen per cent of the total bill for food or beverage services;

     (3)  The server verbally notifies the customer before the bill is paid that a mandatory gratuity service charge is automatically applied to the bill; and

     (4)  The menu contains a clear and conspicuous notice in large font indicating that a mandatory gratuity service charge is automatically applied to the bill and the exact percentage that will be charged.

     [(b)] (c)  As used in this section, unless the context requires otherwise, "porterage" means the act of moving luggage, bags, or parcels between a guest room and a lobby, front desk, or any area with vehicular access at a hotel, hotel-condominium, or condominium-hotel, as defined in section 486K-1."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect upon its approval.

Report Title:

Restaurants; Mandatory Gratuity Service Charge; Party Size; Limit; Notification

Description:

Prohibits restaurants from imposing a mandatory gratuity service charge for food or beverage services unless the party includes ten or more customers, the service charge does not exceed eighteen per cent, and the customer is notified of the service charge.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.