SPRINGFIELD, Ill. (WAND) — Some Illinois Democrats are renewing their push to eliminate the state's tip credit to help tipped workers receive a fair wage. Advocates are calling for a new tax credit worth $1.50 per hour per employee for owners who do not take the tip credit before it is eliminated in 2027.
The national organization One Fair Wage has been fighting for several years to abolish the subminimum wage for service industry workers. President Saru Jayaraman told WAND News Friday that Illinois should raise the minimum wage for tipped workers to $15.
"As consumers are feeling costs go up generally, they are angry about being asked to tip in every environment and tipping less in every environment, including restaurants," Jayaraman said. "It is making it more and more difficult for workers relying on a subminimum wage of $8.40 in Illinois to have to rely on tips which are declining."
Jayaraman said 71% of tipped workers in Illinois are women and 23% of the tipped workforce are people of color. However, leaders from the Illinois Restaurant Association told WAND News eliminating the tip credit would not lead to a raise for these workers.
"By law, every wait person or bartender that gets the tip credit, $9 per hour, needs to make at least $6 an hour in tips," said Illinois Restaurant Association President Sam Toia. "We know what people make in tips now because the supermajority, almost 85% of the people, use debit cards or credit cards. The average wait person in the state of Illinois makes close to $29 per hour."
One Fair Wage advocates note that Chicago has already seen success with higher incomes for tipped workers and restaurant employment remaining constant. Seven other states have also implemented One Fair Wage policies to ensure workers can afford the costs of daily life.
"Forcing workers to live on that chaos of climate and people's moods, and biases, and how they feel that day is not fair," Jayaraman said. "It's not right, and it's not sustainable for workers in a time of skyrocketing costs."
Yet, Toia said Illinois could lose $270 million in taxes per year if every restaurant took the $1.50 tax credit per hour per employee until the subminimum wage is phased out.
"These are California activists. I think California has their own issues and I think that the California activists should go back to California and work on their California issues," Toia said. "We, in Illinois, can take care of our issues in Illinois."
The One Fair Wage plan passed out of the House Executive Committee on a partisan 8-4 vote. Although, House Bill 2982 will be held on second reading when the House returns to Springfield April 7.
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