CHICAGO – A new law proposed in Illinois would change wages for tipped workers across the state. Minimum wage would be mandated under the new law, forcing restaurants to restructure their operations.
At a Capitol press conference this week, State Representative Mike Coffey (R-Springfield) joined business leaders and the Illinois Retail Merchants Association (IRMA) to oppose the legislation, saying it would have a negative impact on employees and business owners.
“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,” Rep. Coffey said. “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.”
HB 5345 amends the minimum wage law and would require all businesses who currently employ tipped workers to compensate employees at $15 an hour, beginning in 2025. The legislation has so far failed to attract key support, as the witness slips filed on this bill show 564 opponents and just 37 proponents.
Rep. Coffey continued, “As I’ve traveled the district, employees who have excelled at providing service to residents have asked me to stand up and fight against this bill. They are concerned their take-home pay will decrease and businesses will close their doors. We must do everything possible to encourage businesses in this state to grow and not saddle them with additional burdens.”
Under the current system, businesses pay a portion of the tipped employee’s hourly minimum wage, with the rest being made up by tips to equal at least the full state-mandated minimum wage. The base wage for tipped employees in Illinois is currently $8.40 per hour, and minimum wage is $14 per hour.
If employees do not make at least $14 per hour with combined base wage and tips, businesses are required by law to pay the difference to ensure that every tipped worker makes at least minimum wage.
The group Protect Illinois Restaurants reported a recent survey showed that 87% of tipped restaurant employees said the current tipping system works for them and should not be changed. If tipped wages are eliminated, 86% of employees believe that they will earn less.