Makes it unlawful to solicit a gratuity in a deceptive manner.
Summary
This bill would add a new section to the General Business Law making it unlawful to solicit gratuities in a deceptive manner. It defines several practices as deceptive, including displaying inaccurate dollar amounts tied to suggested tip percentages or automatic gratuities, calculating suggested gratuities on the total bill including tax or other fees, failing to present a no-tip option prominently and easily, and showing a suggested percentage or dollar amount without the corresponding equivalent clearly disclosed nearby. The bill also authorizes the Attorney General to identify additional prohibited gratuity solicitation designs or functions by rule.
The bill places obligations on both establishments and point-of-sale terminal manufacturers or software providers. Manufacturers and software providers would need to ensure new terminals do not include prohibited tipping designs and, where possible, update existing systems to remove them. Establishments would be required to bring noncompliant terminals into compliance by the effective date, with limited exceptions where the terminal cannot be updated, and a short grace period if updates become available within 60 days of the effective date. Businesses that design or manufacture their own terminals would be treated like manufacturers for compliance purposes.
Impact
The bill would amend the General Business Law by creating a new consumer-protection provision aimed at tipping prompts and gratuity screens at point-of-sale terminals. It would affect restaurants, retail businesses, and other public-facing establishments that use digital payment systems, as well as POS terminal manufacturers, software vendors, and businesses that build their own payment interfaces. The Attorney General would gain authority to enforce the new standard and to expand the list of prohibited deceptive gratuity practices through regulation.
Sentiment
Based on the bill text and available context, the measure appears to be framed as a consumer-protection and transparency bill, with an overall supportive policy intent. There is no recorded committee debate or vote history in the provided materials, so no formal opposition or support can be measured from proceedings. The structure of the bill suggests concern about misleading tip prompts and automatic gratuities, indicating a generally pro-consumer sentiment.
Contention
The main points of contention likely involve how far the state should regulate point-of-sale tipping interfaces and whether the compliance burden on businesses and technology providers is too broad. Potentially disputed issues include the requirement to show a no-tip option prominently, the prohibition on calculating tips from totals including tax or fees, and the Attorney General’s authority to define additional deceptive designs by regulation. Businesses and POS vendors may view the bill as imposing software redesign and update obligations, while consumer advocates would likely support the clearer disclosure and anti-deception requirements.
Labor: hours and wages; employer offset of wages due an employee in a pay period based on the amount of gratuities the employee receives; prohibit. Amends sec. 4d of 2018 PA 337 (MCL 408.934d).