An “eligible employee” is an employee who receives tips directly or indirectly in the course of his or her duties at a regulated establishment covered by the tax measures respecting the reporting of tips.

The term also refers to an employee whose tips, received directly or indirectly, come entirely or almost entirely (90% or more) from the service charges paid by the customers of the regulated establishment. In this case, the following conditions must be met:

• Service charges represent, in all or substantially all cases, at least 10% of the amount of tippable sales, and customers are informed of the mandatory nature of the charges.
• Any tip-sharing arrangement in effect at the establishment is administered by the employer.