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How Does Illinois’ Current Minimum Wage Law Affect Tipped Workers?

On Behalf of | Jun 21, 2022 | Firm News

Many employers have complied with the new minimum wage laws for Illinois, which went into effect on January 1, 2022. Currently, the minimum wage in Illinois is a tiered system. It raises the base minimum wage to $12 per hour for all employees except those who receive tips and those who are under the age of 18 and who work less than 650 hours per calendar year.  The minimum wage for those working in Chicago, however, is $15 per hour but is set to rise to $15.40 for employers with at least 21 employees.

The financial breakdown is as follows:

  • Regular employees’ minimum wage is $12.00 per hour.
  • Tipped employees’ minimum wage is $7.20
  • Employees under the age of 18 who work less than 650 hours per year are paid $9.25 per hour.

Tipped Wages and Minimum Wage

While the above list of new minimum wage rates seems straightforward, there are some gray areas and the potential for tipped workers to receive less than minimum wage. Currently, the $7.20 minimum wage rate for tipped employees assumes that the combined total minimum wage plus the dollar amount of tips received per hour would be equal to or greater than $12.00 per hour.

Both employees and employers should understand that when the combined hourly wage for tipped workers drops below $12.00 per hour, the employer must make up the difference by paying the employee a higher rate for the period when the employee did not meet the minimum wage requirement.

Differences in Illinois Minimum Wage Rates

Adding to the confusion over minimum wage rates is the fact that there are different minimum wage scales in different parts of Illinois. For example, the minimum wage rates in Chicago will increase to $15.40 per hour for employers with at least 21 employees, though State’s minimum wage is less. Also, the minimum wage in Cook County differs from those set by the State and those that are part of the wage ordinance in Chicago.

The situation makes it more confusing to figure out who is paid what and why. Employees, tipped or not, should be paid according to the wage law that dictates the highest minimum wage. For example, if tipped employees in Chicago are paid $15 per hour, then employers who hire tipped employees in Chicago must pay their tipped employees $15 regardless of how much the employee makes in tips. Even though the Illinois wage statute says that tipped employees should make at least $7.20 per hour as a minimum wage, provided that tips get that employee to $12 per hour, in Chicago they need to be paid at the rate dictated by the Chicago wage statute.

While adding to the confusion, these differences in minimum wage rates for tipped employees help to offset the higher cost of living in different areas of the state.

What Can Employees Do

First, if you are an employee in Chicago or the surrounding area, and you feel that you are not being paid correctly, then contact an employment lawyer. Be sure to keep records showing how much you are paid, and how much you receive in tips. That documentation will help us determine your payment and hourly wage as it applies to the Illinois minimum wage law.

Contact Goldman & Ehrlich For More Information Regarding Minimum Wage Laws

Whether you are a tipped employee or not, your employer must abide by minimum wage laws. Determining whether you’re being paid correctly is more complex when you are a tipped employee. If you have any questions or need information regarding your wages, contact our experienced employment lawyers at Goldman & Ehrlich.  Our skilled team will help you navigate any complex wage issues you may have.

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