The New York Department of Labor has issued rules on what until now has walked a gray line between custom and law: the tip.

The new regulations let employers set whatever kind of tip policy they wish, whether staff pools tips or collects their own and gives out shares to other people on the team.

Employers are forbidden from skimming from the tips and the new laws delineate which staff are eligible for tips (food service only, waters, bartenders, bussers, sommeliers, and hosts, as long as they are not also managers).

The work order also says that restaurants and caterers can’t put automatic gratuities on bills that sound like they’re tips but then actually pocket the money themselves.

The new clarity follows a lawsuit filed against famous NY-based chef Mario Batali who was sued by waitstaff at his restaurants for allegedly withholding tips made on credit cards.

Work Order Summary (PDF) [labor.state.ny]
Full text of the new regulations here (PDF) [labor.state.ny]

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