The tip credit survives a legislative challenge in Illinois

Proponents of killing the credit acknowledged this week that legislation outlawing the employer concession is virtually dead for this year.
Proponents failed to discontinue counting tips toward servers' and bartenders' wages. | Photo: Shutterstock

Proponents of a bill to kill Illinois’ tip credit conceded Tuesday that the measure won’t be taken up by the state legislature before it recesses Friday, giving the restaurant industry an early victory in what’s likely to be six months of combat over the employer break.

The Illinois proposal was seen as having a significant chance of passing because Chicago’s City Council voted Oct. 6 to phase out the city’s credit. Without a similar ban for all of Illinois, restaurants outside the city would be at a disadvantage in recruiting workers, advocates of the state proposal argued in part.

Their main contention was that servers and bartenders are being shortchanged in pay because restaurants need only pay them $8.40 per hour if gratuities raise the employees’ hourly income to the mandated state minimum of $14.

The state bill’s main champion, Rep. Lisa Hernandez, held a press conference Tuesday where she pledged to take up the proposal again in subsequent legislative sessions.

“The fight for one fair wage will, and must, continue,” said Hernandez, who represents a section of Chicago near Midway International Airport.

The main proponent outside of government has been One Fair Wage, a labor advocacy group backed by the Service Employees International Union, or SEIU. The group contends that tipping fosters sexual harassment of servers and bartenders by making their incomes dependent on pleasing customers rather than executing specific job functions. Many may feel they have to tolerate misbehavior if they want to maximize their take-home pay.

One Fair Wage is currently collecting signatures in Ohio to put an initiative banning the tip credit on the November general election ballot.

Similar initiatives are being pushed in Massachusetts and Arizona. Elsewhere, it’s championing legislation that would impose a ban.

In all, it has targeted 11 states as jurisdictions that could be swayed to outlaw the concession.

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