BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Two thirds of all members elected to each House thereof concurring therein):

Section 1. Amend Section 902, Chapter 9, Title 19 of the Delaware Code, by striking said section in its entirety and substituting in lieu thereof the following:

"§902. Minimum Wage Rate

(a) Every employer shalt pay wages at the rate of not less than $3.00 per hour to every employee in any occupation, except as may be otherwise provided under this Chapter.

(b) Gratuities received by employees engaged in occupations in which gratuities customarily constitute part of the remuneration may be considered wages for purposes of this Chapter in an amount not to exceed 33 1/3% of the minimum rate as set forth in subsection (a) hereof.

(c) For purposes of this section:

(1) An employee engaged in an occupation in which gratuities customarily constitute part of the remuneration shall be any worker engaged in an occupation in which workers customarily and regularly receive more than $30 per month in tips or gratuities.

(2) 'Gratuities' means monetary contributions received directly or indirectly by an employee from a guest, patron, or customer for services rendered where the customer is entirely free to determine whether to make any payment at all and, if so, the amount.

(3) A 'primary direct service employee' is one who in a given situation performs the main direct service for a customer and is to be considered the recipient of the gratuity.

(4) A ' service charge' Is an obligatory sum of money included in the statement of charges. Clear and conspicuous notice must be made on either the menu, placard, the front of the statement of charges, or other notice given to the customer indicating that all or part of the service charge is the property of the management. Such notice must be clearly printed, stamped, or written in bold type. A service charge assessed to customers, patrons, or guests without such notice is the property of the primary direct service employee (s). For the purposes of this section, type which is at least 18 point (one-fourth inch) on the placard, or 10 point (one-eighth inch) or larger on all other notices shall be considered clear and conspicuous.

(d) Any gratuity received by an employee, Indicated on any receipt as a gratuity, or deposited in or about a place of business for direct services rendered by an employee is the sole property of the primary direct service employee and may not be taken or retained by the employer except as required by state or federal law.

Employees may establish a system for the sharing or pooling of gratuities among direct service employees, provided that the employer shall not in any fashion require or coerce employees to agree upon such a system. Where more than one direct service employee provides personal service to the same customer from who gratuities are received, the employer may require that such employees establish a tip pooling or sharing system not to exceed 15% of the primary direct service employee's gratuities. The employer shall not, under any circumstances, receive any portion of the gratuities received by the employees.

The Department may require the employer to pay restitution if the employer diverts any gratuities of its employees in the amount of the gratuities diverted. if the records maintained by the employer do not provide sufficient Information to determine the exact amount of gratuities diverted, the Department may make a determination of gratuities diverted based on available evidence."

Approved July 3, 1986.