Legislation would phase out subminimum wage for tipped workers in Illinois

[February 27, 2023]  By Kevin Bessler | The Center Square

(The Center Square) – In an effort to attract workers to the restaurant and bar business, some Illinois lawmakers are proposing hiking the wages of tipped staff.

Legislation has been filed that would phase in a full minimum wage for service workers in addition to their tips. At least a dozen other states are considering eliminating subminimum wages. Under federal law, some workers can be paid less than the minimum wage, such as tipped workers, students and disabled workers. Illinois' minimum wage is $13 an hour. The state's subminimum is $7.80 an hour for workers who get tips

"When it comes down to it, to live on $7.80 an hour is just not doable, it's not sustainable and frankly, its exploitative," said State Sen. Christine Pacione-Zayas, D-Chicago, the sponsor of Senate Bill 293.

The group advocating for the pay raise, One Fair Wage, says more than one in seven Illinois workers have left the industry since last year, and over one third of workers who remain in the Illinois restaurant industry are considering leaving their job.

State Rep. Mike Coffey, R-Springfield, who owns a restaurant in Springfield, said the gratuity system that's in place has always worked just fine. If a tipped employee doesn't make a full minimum wage, the employer makes up the difference.

"They've got a system that works, they need to leave it alone," Coffey said. "They've got to quit going after and trying to find out new ways to tax people and new regulations to hamper business."

A group advocates for increasing tipped workers' wages at the Illinois State Capitol
Greg Bishop / The Center Square

Some are concerned that the higher wages will eventually affect menu prices. There is also a conversation about the effects on service if a worker isn't relying on tips.

"Just because you are now making what is technically defined as a livable wage doesn't mean that automatically makes you a jerk in terms of how you approach your job," Pacione-Zayas told The Center Square.

Coffey argues that the current system of tipping good service is capitalism at work.

"I think that is what differentiates the Untied States of America from a lot of these other countries," Coffey said. "We reward hard work, so it gives the customer the ability to reward somebody for great service and take away if the service is not great."

Today, 43 states use subminimum wages.

Greg Bishop contributed to this report.

Kevin Bessler reports on statewide issues in Illinois for the Center Square. He has over 30 years of experience in radio news reporting throughout the Midwest.