A group of tipped workers, service operators, and local businesses gathered at the Capitol in Springfield yesterday to urge the General Assembly to reject a proposal that would eliminate the tip credit in the State of Illinois.
Under House Bill 5345, proposed by a number of House Democrats from Chicago, all tipped workers in the state would have to be paid at least Illinois’ regular minimum wage with tips put on top of that.
Currently, minimum wage in Illinois is $14 with tipped workers starting at $8.40 an hour. Workers are required to make the minimum wage through a combination of wages and tips. If the tips fall short, their employers have to make up the difference.
The new proposal would eliminate the sub-minimum wage and raise the hourly rate for tipped employees to the state’s standard minimum wage with tips added on top of that number.
State Representative Mike Coffey of Springfield was one of the speakers at the gathering at the Capitol yesterday. He says the impact of the new legislation bring about some great concern for Illinois’ tipped workers: “My family has been deeply rooted in the restaurant industry since 1948. The impact of this bill is a cause for great concern. It is evident that HB5345, if passed, would bring about detrimental consequences such as increased inflation and job losses for hard-working Illinois residents. Through conversations with employees within the district, it is clear that they vehemently oppose this bill as it threatens their livelihoods and well-being of their families. As a representative of the 95th District, it is my duty to vehemently oppose this bill for the sake of both employees and business owners alike.”
Coffey said the consequences of the bill would be dire: “This legislation would cause turmoil in the service industry, causing job creators to cut good-paying positions and putting these businesses at risk of closure. Ultimately, consumers who are already feeling the higher cost of living in this state will have to pay more to offset the higher labor costs.”
According to the Illinois Restaurant Association and the Illinois Retail Merchants Association, the bill is being sold as a raise for tipped workers, but the IRA says it will do more harm than good, as it will fundamentally change the way all restaurants operate, hurting smaller, family-run and minority-owned businesses the most.
The bill passed out of the House Labor & Commerce Committee yesterday.
One Fair Wage, an organization in favor of the bill, says that the more than 200,000 tipped workers in the state are unfairly affected by the sub-minimum wage. They say this disaffection hits women and minorities the most. President of One Fair Wage, Saru Jayaraman, praised lawmakers for moving the bill forward to the full House: “Today in Illinois, women working off of tips in the service industry earn nearly $5,000 per year less than their male colleagues. Black women, in particular, earn $6,500 less annually than their white male colleagues. A direct legacy of slavery, the subminimum wage for decades has been used as a tool to force service industry workers, particularly women and people of color, to live in poverty. And to make matters worse, a recent study by the University of Illinois found that local workers are experiencing skyrocketing levels of wage theft, discrimination, and sexual harassment. The advancement of HB 5345 represents a historic step towards justice for tipped workers in Illinois. For too long, the subminimum wage has perpetuated income inequality and economic insecurity among service workers and remain committed to ensuring that all workers in Illinois have the opportunity to earn a fair and living wage. We applaud the efforts of Rep. Hernandez and all supporters of this vital legislation.”
Currently, seven states — Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington, along with Washington D.C. — have laws in place to guarantee tipped workers make minimum wage.
Chicago enacted similar legislation in October, which phases out the city’s tip credit over five years, culminating with tipped employees receiving minimum wage in 2028.
Illinois Retail Merchants Association President Rob Karr said during the press conference and committee hearing yesterday that lawmakers should wait until the Chicago legislation runs out and see if its effective or not.
Capitol News Illinois reports that the measure passed committee by a vote of 17-11, with just one Democrat voting against the bill and another not voting at all on the measure. Democrats, who control the General Assembly, subbed out seven members on the Labor and Commerce Committee before the vote.