MINIMUM WAGE-GRATUITY WAGE
The bill's introduction has elicited diverse reactions from various stakeholders. Proponents argue that eliminating the allowance for gratuities will ensure a fair living wage for workers who rely on tips for their income. This change could potentially enhance job security for service workers by guaranteeing they receive the full state minimum wage. On the contrary, opponents fear that such a move could lead to reducing employment opportunities in sectors heavily reliant on tipping, like restaurants and bars, as businesses may adjust to increased labor costs by hiring fewer workers or cutting hours.
House Bill 5345, introduced by Rep. Elizabeth 'Lisa' Hernandez, seeks to amend the Illinois Minimum Wage Law. The bill proposes that from January 1, 2025, employers will no longer be able to count gratuities as part of the minimum wage paid to employees. Instead, each employee must be paid at least the applicable minimum wage rate without any deductions for gratuities, aligning with local ordinances in home rule municipalities. This marks a significant shift in how wages for tipped employees are calculated, effectively eliminating the 'tip credit' that has allowed employers to pay lower hourly wages if employees receive gratuities.
A notable point of contention in the discussions surrounding HB5345 is its preemption of home rule authority. The bill explicitly states that it has the power to override local regulations regarding wages that may be more advantageous to employees. This raises concerns about local governments' ability to make decisions tailored to their communities' needs, especially in areas where local economies might differ from the state economy. Critics argue that the bill undermines local governance and may limit the effectiveness of local wage initiatives aimed at supporting low-income workers within specific jurisdictions.