Effort to Eliminate Subminimum Wage for Tipped Employees in Illinois Falls Short, Advocates Vow to Continue the Push

Waiter with coffee cup. File photo. (Credit: Towfiqu barbhuiya / Pexels)File photo. (Credit: Towfiqu barbhuiya / Pexels)

Tips can still be used to bring Illinois restaurant workers’ paychecks up to the state-set hourly minimum wage, after efforts to eliminate the sub-minimum wage came up short.

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Advocates who have been pushing to eliminate statewide what is called the subminimum wage acknowledged Tuesday that their efforts to pass the measure during the General Assembly’s spring session won’t move forward.

But sponsoring state Rep. Lisa Hernandez, D-Cicero, said she’ll continue to work on the measure (House Bill 5345) with a goal of passing it later this year, noting that the long-running campaign “made more progress than ever before” by winning a “critical” vote out of a House committee and gaining nine co-sponsors.

“This marks a milestone in this long-running campaign and makes it clear that change is on the horizon,” Hernandez said. “I believe that we have made great strides toward a bill that is good for everyone, bridging the interests of restaurant workers and restaurant owners and helping to stabilize an industry that was so impacted by the pandemic.”

In October, Chicago adopted a proposal that phases out the subminimum wage over five years starting in July. 

Currently, Illinois law allows employers to pay workers 60% of the minimum wage as a base – so, $8.40 an hour given that the statewide minimum wage is currently $14. But the law also stipulates that employers must make up the difference if gratuity doesn’t get the worker to the full $14 an hour.

It’s an argument used by the restaurant industry against eliminating the subminimum wage.

Some tipped workers, though, say that may work in theory, but not in practice.

At a press conference in Springfield on Tuesday, members of the One Fair Wage campaign said the current law adds complicating barriers for low-wage workers who have to fight for what they’re owed. And even if restaurants want to follow the law, they may have difficulty because they’re small businesses with staff working long, frequent shifts and can become “overwhelmed with the accounting.”

Tips are a recognition of service, they said, while wages should be paid for by business owners outright as they’re responsible for their employees.

Richard Rodriguez, the national policy director for One Fair Wage, said the subminimum wage allows gender and racial pay inequities, given that women and people of color primarily work in tipped jobs.

“Tip workers in subminimum wage states face higher poverty rates and greater harassment because they depend on tips for their livelihood,” Rodriguez said.

The Illinois Restaurant Association and Protect Illinois Hospitality groups, however, say that the median tipped restaurant worker makes $28 – double the $14 minimum wage – and that doing away with the tipped credit policy could actually lead to lower worker paychecks, as customers might stop paying gratuity. 

They also say that businesses’ increased labor costs could cause restaurants to raise prices, decrease staff hours or jobs, or even close completely.

Meanwhile, on Monday night, a House committee advanced another contentious measure that would eliminate the subminimum wage, in this case for persons with disabilities participating in specialized work programs.

Organizations with federal 14(c) wage certificates are authorized by the U.S. Department of Labor “to pay subminimum wages to workers with disabilities that impair their productivity for the work they perform.”

Chicago Democratic Rep. Theresa Mah’s “Dignity in Pay Act” (House Bill 793) would ban their use in Illinois after 2029.

“Paying workers with disabilities subminimum wages perpetuates harmful, unfair and inaccurate stereotypes about the potential and worth of people with disabilities,” the bill reads, and eliminating it “is crucial for advancing economic justice and accelerating dignity and self-sufficiency for all people.”

But participants in 14(c) wage certificate programs and the disabled community are divided.

Critics say requiring a full minimum wage would force nonprofits to discontinue the programs, stripping disabled individuals of the opportunity to do meaningful work and build skills.

Contact Amanda Vinicky: @AmandaVinicky[email protected]

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