Illinois State Rep. Camille Lilly (78th) has introduced a bill that would phase out the tipped minimum wage between 2023 and 2025. The measure would ensure that tipped workers receive a base wage that’s more than the regular minimum wage.
House Bill 5139 is part of a nation-wide push headed by the One Fair Wage service worker advocacy coalition to raise minimum wages for tipped employees in at least 25 states and Washington D.C. by 2026. In most states, the minimum wage for workers that get tips is lower than the minimum wage based on the assumption that the tips would make up the difference. The coalition argues that, in practice, this arrangement leaves service workers with barely enough money to live on and forces them to put up with harassment.
During the Feb. 14 virtual press conference, which was held over Zoom, activists and legislators that support the imitative framed the wage increase as a way to reverse the “Great Resignation,” noting that the service workers are less financially secure than ever while facing higher risk of COVID-19 exposure and a power imbalance inherent in asking them to enforce mask and proof of vaccination against the very customers they depend on for tips.
According to the U.S. Department of Labor, seven states and two territories – most notably California and Alaska – don’t have a tipped minimum wage. Sixteen states, including Indiana, use the federal tipped minimum wage of $2.13. The rest set their own regular and tipped minimum wages.
Under the current Illinois minimum wage law, the tipped minimum wage is 60% of the regular minimum wage. Lilly’s bill would raise the tipped minimum wage to 80% of the regular minimum wage between July 1, 2023 and Dec. 31, 2023, then to 90% in 2024, before requiring employers to pay service employees at least the regular minimum wage starting Jan. 1, 2025.
Illinois is currently in the midst of raising the regular minimum wage to $15 an hour by Jan. 1, 2025, with the minimum wage going up every year. Municipalities are allowed to raise minimum wages above the state minimum wage. The Chicago regular minimum wage is already $15 an hour for businesses with 21 or more employees and $14 an hour for businesses with 20 or fewer employees, while the tipped wage is $8.40 and $8.10, respectively. Any changes to how the state defines tipped wages would affect Chicago, as well.
During the Feb. 14 press conference, One Fair Wage President Sarumathi “Saru” Jayaraman, noted that the pandemic threw many disadvantages of tipped wages into sharp relief. When restaurants closed due to stay-at-home restrictions, restaurant employees couldn’t get unemployment benefits because their wages were too low.
Tabina Gibson, who said he has lived in several neighborhoods across the South Side and worked in the service industry for over 20 years, experienced that first-hand.
“I knew, it being thrown in my face like that, that something has to change,” she said. “[A wage of] $6.90 an hour plus tips — I was worth more than that.”
When restaurants were allowed to reopen, Jayraman said, restaurant employees faced more belligerent behavior and sexual harassment than ever. Having to enforce pandemic restrictions against people on whose tips they depended, Jayraman said, was a “disaster.”
Several business and restaurant owners spoke in support of the campaign, saying that higher wages lead to improved productivity and morale, and that better pay ultimately helps their bottom line.
Victor Love, current owner of Josephine’s Southern Cuisine on the South Side said that he was initially skeptical of the measure, but after studying the history of tipping and thinking about his employees’ long-term futures, he changed his mind.
The Illinois Restaurant Association, which previously lobbied against removing the tipped minimum wage, did not respond to calls seeking comment about the bill. In a 2019 editorial for Crain’s Chicago Business, Sam Toia, the association’s president, argued that getting rid of tipped minimum wages would strain restaurants’ already small profit margins.
Love pushed back against the idea that eliminating tipped wage would increase costs, arguing that costs are already rising and that fees related to delivery apps such as DoorDash are a bigger strain on restaurants’ budgets than any wage increases.
“This work does come from the heart, because we must address poverty in our states and in the country,” Lilly said. “It is important here in Illinois that we end the sub-minimum wage. It makes a difference to quality of life and healthy families. Never before has it been as important as it is today.”