ST. CHARLES – Businesses across the state are weighing the impact of Gov. J.B. Pritzker's recent action to sign a bill raising the Illinois minimum wage to $15 per hour by 2025.
Jeffrey Risch, a partner with the law firm SmithAmundsen, talked to St. Charles Chamber of Commerce members about the state's new minimum wage law during a Chamber program on April 4 in the St. Charles City Council Chambers. He chairs the firm's management-side Labor and Employment Practice Group.
Currently, the minimum wage in Illinois is $8.25 per hour. Under the new legislation, the minimum wage will increase to $9.25 by Jan. 1, 2020 and to $10 on July 1, 2020. The minimum wage will then increase by $1 per hour each Jan. 1 until it reaches $15 per hour in 2025.
"I live and breathe small to mid-size private businesses," Risch, a St. Charles resident, told those in attendance. "I don't represent Coca-Cola and I don't want to represent Coca-Cola."
He talked about how the new law will affect employees who receive tips. The new minimum wage law preserves the state’s “tip credit,” which allows employers to pay tipped employees 40 percent of the minimum wage, so long as the employer makes up the difference if employees’ tips don’t actually add up to at least the full minimum wage.
"Some of you allow tip pooling," Risch said. "Tip pooling is legal as long as management and the owners don't share in those tips. The employees should be the sole beneficiary."
For those employers caught breaking the new law, their employees are entitled to three times the amount of the underpayment and 5 % of the underpayments for each month following the date it should have been paid (an increase of 3%), as well as their reasonable attorney’s fees and costs.
In addition, companies that break the law face a penalty of $1,500 payable to the Illinois Department of Labor’s Wage Theft Enforcement Fund. The new law also includes a penalty of $100 for each employee if an employer fails to maintain “true and accurate” payroll records.
St. Charles Chamber President and CEO Jim Di Ciaula said the new minimum wage law has generated much discussion among the Chamber's members.
"We wanted to prepare them as new legislation is coming out or ready to come out so they're not blindsided," he said.