Proposal to eliminate lower minimum wage for tipped workers sparks debate
Feb. 7—SPRINGFIELD — Advocates and restaurant industry leaders are at odds over a proposal that would eliminate the lower minimum wage for tipped workers.
One Fair Wage, a national group seeking to end all subminimum wages in the U.S., shared on social media that its members were in Springfield on Tuesday to introduce legislation, and the Illinois Restaurant Association said that a proposal has been introduced that would eliminate the lower minimum wage for tipped workers statewide.
"We wholeheartedly disagree with any decision to eliminate the tip credit," the association said in an official statement. "The removal of the tip credit will hurt tipped workers, restaurants and customers across the entire state of Illinois when we should be doing what we can to help them. This legislation will do more harm than good as it will fundamentally change the way all restaurants operate, hurting our smaller, family-run and minority-owned businesses the most."
The association said that tipped employees do not make less than minimum wage and claimed that full-service tipped restaurant workers have a median wage of over $28 per hour. They also said that the proposed changes would lead to job cuts, an increase in labor costs and higher prices for customers.
On the other hand, One Fair Wage claims that the subminimum wage is "a direct legacy of slavery" that affects women and people of color in particular.
"One Fair Wage organizes workers, employers and consumers to campaign for federal, state and local policy to require all employers to pay a full, livable minimum wage with gratuities on top, lifting millions of tipped and subminimum wage workers out of poverty," the organization's website states.
According to the Illinois Department of Labor, the state's current minimum wage is $14 per hour for workers 18 years and older.
"Tipped employees must be paid minimum wage, but an employer may take credit for the employee's tips in an amount not to exceed 40 percent of the wages," the department's website states.
This makes the minimum wage for tipped workers $8.40 an hour.
Jeff Buckler, owner of Buford's Pub in Sadorus, said that he pays his staff more than the tipped minimum wage, as you can't be sure how much people will tip.
"I just think everybody should have a chance to make a decent wage," he said.
He added that the state requires that restaurants make up the difference if an employee's tips don't get them to $14 an hour; however, this has not been an issue for his business, as servers typically make more than that.
Buckler said he is unsure how to feel about the idea of eliminating the subminimum wage for tipped employees. He believes that servers earn more under the current structure, as "most people know that they're paid less than minimum wage."
Consequently, he thinks that people would not tip as much if servers were automatically paid minimum wage.
In October, the Chicago City Council approved an ordinance proposed by One Fair Wage that will phase out the city's subminimum wage over a five-year period. Mayor Brandon Johnson said in a press release that the legislation was "the culmination of years of advocacy and outreach by the One Fair Wage coalition, restaurant workers and advocates."
One Fair Wage also previously sought to gather support for HB5139 during the 2022 session. If approved, the bill would have eliminated the subminimum wage for tipped workers by January 2025 via a phased approach. However, the legislation did not make it out of the House.
