HOUSE BILL REPORT
HB 1583
This analysis was prepared by non-partisan legislative staff for the use of legislative members in
their deliberations. This analysis is not a part of the legislation nor does it constitute a
statement of legislative intent.
As Reported by House Committee On:
Commerce & Labor
Title: An act relating to disclosure of the percentage of automatic service charges paid to servers.
Brief Description: Requiring disclosure to customers of the percentage of automatic service charges paid to servers.
Sponsors: Representatives Moeller, Conway, Darneille, Wood, Green, Ormsby and Morrell.
Brief History:
Commerce & Labor: 2/22/07, 2/26/07 [DPS].
Brief Summary of Substitute Bill |
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HOUSE COMMITTEE ON COMMERCE & LABOR
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 7 members: Representatives Conway, Chair; Wood, Vice Chair; Condotta, Ranking Minority Member; Chandler, Assistant Ranking Minority Member; Green, Moeller and Williams.
Staff: Jill Reinmuth (786-7134).
Background:
Neither federal nor state law requires businesses that impose automatic service charges to
disclose the percentage of such charges that are paid to employees.
Summary of Substitute Bill:
Employers that provide food, beverages, entertainment, or porterage must disclose the
percentage of automatic service charges that are paid directly to the employees serving the
customers. The disclosures must be in itemized receipts and menus provided to the
customers. The service charges are separately designated amounts collected from customers
that are for services provided by employees or are described in such a way that customers
might reasonably believe that the amounts are for services provided by employees. The
service charges are in addition to hourly wages paid to employees. Examples include charges
designated as service charges, gratuities, delivery charges, and porterage charges.
Substitute Bill Compared to Original Bill:
The disclosure requirement is codified in a chapter governing hotels, lodging houses, and
restaurants instead of in the Washington Minimum Wage Act.
Appropriation: None.
Fiscal Note: Available.
Effective Date of Substitute Bill: The bill takes effect 90 days after adjournment of session in which bill is passed.
Staff Summary of Public Testimony:
(In support) This bill is pretty simple. It requires that the menu show who gets the automatic
service charge. Most customers think all of the service charge or the tip goes to the employee
providing services to the customers. While some employers give all of the charge to that
employee, others give only a little. It is increasingly common that employers give none of the
charge to that employee. Customers don't understand, and sometimes, employees don't
either. This bill would make it clear who is getting what.
(Neutral) Services charges are subject to B&O tax, sales tax, and income tax.
(Available for questions) There is a fiscal note because this bill would add another layer of
enforcement. If there are complaints from employees or customers, the Department of Labor
and Industries would be required to investigate the complaint in the same manner as other
wage payment complaints. We assume that there would be 99 percent compliance.
(Opposed) None.
Persons Testifying: (In support) Representative Moeller, prime sponsor; and Rick Sawyer,
Gregory Avent, Rebecca Carilao, and Wanda Buck, UNITE HERE.
(Neutral) Trent House, Washington Restaurant Association.
(Available for questions) Suchi Sharma, Department of Labor and Industries.