On January 23, 2025, the New Hampshire Legislature introduced House Bill 757, a significant piece of legislation aimed at clarifying the practices surrounding employee tip pooling and automatic service charges in the hospitality industry. This bill seeks to address ongoing concerns about transparency and fairness in how tips and service charges are distributed among employees.

One of the key provisions of House Bill 757 is the establishment of voluntary participation in tip pooling or sharing among employees. This provision allows staff members to decide whether to opt into such arrangements on a shift-by-shift basis, ensuring that participation is not mandated and that employees retain control over their earnings. This aspect of the bill has garnered support from workers who value the autonomy it provides.

Additionally, the bill introduces a new section to the Revised Statutes Annotated (RSA) 279, defining "automatic service charges." These charges are described as fixed percentage amounts collected by employers from customers, purportedly for services rendered by employees. A critical requirement of the bill mandates that employers disclose on itemized receipts the percentage of the automatic service charge that is allocated directly to the employees serving the customer. If any portion of the charge does not go to the employees, the receipt must specify the purpose of that allocation. This transparency aims to enhance customer awareness and ensure that service charges are used appropriately.

The introduction of House Bill 757 has sparked notable discussions among stakeholders. Proponents argue that the bill will foster a fairer work environment for employees in the service industry, while critics express concerns about the potential administrative burden on businesses and the implications for customer perceptions of service charges. The debate highlights the delicate balance between ensuring fair compensation for workers and maintaining operational efficiency for employers.

The economic implications of this bill are significant, particularly for the hospitality sector, which relies heavily on tips and service charges as part of employee compensation. By mandating transparency, the bill could influence customer behavior, potentially affecting overall revenue for establishments that implement these charges.

As House Bill 757 moves through the legislative process, its outcomes could set a precedent for similar legislation in other states, reflecting a growing trend toward greater accountability in the service industry. The bill is set to take effect 60 days after its passage, should it receive approval, marking a pivotal moment for employee rights and customer service practices in New Hampshire.