An Act To Clarify the Use of Tips in Payment of Service Employees t;··
Maine Legislature, Session 123, LD 1543
Committee: Labor
Sponsors: SIMPSON, BARTLETT, BURNS, CLARK, DUPREY, HANLEY, HOTHAM, MOORE, PILON, SULLIV AN
Amends: 26 MRSA §663

Legislative Document 
No. 1543 
H.P.1068 
House of Representatives, March 20, 2007 
An Act To Clarify the Use of Tips in Payment of Service Employees 
t;·· 
Submitted by the Department of Labor pursuant to Joint Rule 204. 
Reference to the Committee on Labor suggested and ordered printed. 
Presented by Representative SIMPSON of Auburn. 
Cosponsored by Senator BARTLETT of Cumberland and 
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frl.11!~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BURNS of Berwick, CLARK of Millinocket, DUPREY of Hampden, 
HANLEY of Gardiner, HOTHAM of Dixfield, MOORE of Standish, PILON of Saco, Senator: 
SULLIV AN of York. 
Printed ,m recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 26 MRSA §663, sub-§8, as enacted by PL 1967, c. 466, §4, is amended to 
read: 
8. Service employee. "Service employee", means any employee engaged in an 
occupation, such as waiters, waitresses, bellhops, counter personnel and bartenders who 
serve customers, in which he the employee customarily and regularly receives more than 
~ 
$30 a month in tips. 
Sec. 2. 26 MRS A §664, sub-§2, as enacted by PL 1995, c. 305, §1, is amended to 
read: 
2. Tip credit. An employer may consider tips as part of the wages of a service 
employee, but such a tip credit may not exceed 50% of the minimum hourly wage 
established in this section. An employer who elects to use the tip credit must inform the 
affected employee in advance and must be able to show that the employee receives at 
least the minimum hourly wage when direct wages and the tip credit are combined. Upon 
a satisfactory showing by the employee or the employee's representative that the actual 
tips received were less than the tip credit, the employer shall increase the direct wages by 
the difference. 
The tips received by a service employee become the property of the employee and may 
not be shared with the employer. Service employees may volunteer to pool their tips to 
be split evenly among other service employees or may volunteer to share a part of their 
tips with other employees who do not generally receive tips directly from customers. 
Tips that are automatically included in the customer's bill or that are charged to a credit 
card must be given to the service employee, exc~t that if the employer must pay the 
credit card company a percentage on each sale, the employer may deduct from the 
employee's tip a proportion of the credit card charge that is the same proportion that the 
tip is to the total bill. A tip that is charged to a credit card must be paid by the employer 
to the employee by the next regular payday and may not be held while the employer is 
awaiting reimbursement from a credit card company. 
SUMMARY 
This bill clarifies that tips belong to the employee providing direct service and that 
the entire tip, less a pro rated percentage, if any, charged by the credit card company, 
from any credit card payment must go to the employee. It allows the pooling of tips in 
limited circumstances. It also increases the threshold from $20 a month to $30 a month in 
tips in the expanded definition of service employee. 
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