(a) The following definition of terms shall apply to this section:

1. (1) The term restaurant means any eating or drinking place where food or beverages for human consumption on the premises are offered, including places whose patrons, in whole or in part, consist of members of any club, association or similar organization, but excluding places where patrons pay a fixed amount for meals over any given period of time, not dependent upon the number of meals actually taken.
2. (2) The term service employee means any employee whose duties relate to the serving of food or beverages, or both, in a restaurant, or to the performance of duties incidental thereto.

(b) The value of gratuities or tips received by a service employee is hereby determined to be as follows:

1. (1) Such value, except as provided in subdivision (c) of this section, shall be:

   1. (i) equal to the amount certified by each employee to his employer in a signed statement as received in the form of gratuities or tips, which statement shall be retained by the employer and submitted to the Department of Labor upon request; or
   2. (ii) if such statement has not been submitted by an employee, equal to seven and one- half per centum of the amount charged for food and beverages served by all such employees, except that such value shall be five per centum of such amount in regard to food and beverages served at counters and in drug stores. The amount charged for food and beverages served by all such employees shall be established on the basis of an allocation to them of a reasonably calculated proportion of the total charges for food and beverages served by all service employees. Such value shall be established for each such employee by allocating to him a reasonably calculated proportion of such value as established for all such employees.
2. (2) If an employer adds to each patron's bill a definite service charge for the benefit of his employees, such value shall be equal to the total amount of such service charge. This value shall be in addition to a value if any, established under paragraph (1) of this subdivision.
3. (3) In regard to service employees serving catered or banquet meals, such value shall be 100 percent of their cash wages, notwithstanding any other provision of this subdivision, except that no gratuities or tips shall be deemed received if no tipping by collection or otherwise is permitted and the employer submits a sworn statement to this effect to the Department of Labor.

(c) No gratuities or tips shall be deemed received for the purposes of paragraph (1) of subdivision (b) of this section if:

1. (1) acceptance of tips or gratuities is prohibited by the employer, and
2. (2) patrons are apprised by conspicuously displayed announcements or otherwise in writing, at or before the time bills for food and beverages served are rendered to them that acceptance of tips or gratuities by service employees is prohibited, and
3. (3) the employer adopts reasonable means to insure that tips or gratuities are not received by his employees, and
4. (4) the employer submits to the Department of Labor a sworn statement setting forth that his employees are not allowed to accept tips or gratuities and describing the methods adopted by him in order to obtain compliance with this prohibition by patrons and employees.