You're going to call me some sort of corporate shill or stooge, but that is incorrect. I am a long time Chicago hospitality veteran and would like to clear a few things up.
- Tipped employees never, ever, earned less than the minimum wage. If tips and hourly wage do not combine to $15.80, the employer has to cover the difference.
- Tipped employees routinely make significantly more than the $15.80 minimum. I handle payroll for a prominent company here and calculate average hourly for one of our locations that pool tips. Here are average hourly wages for services over the course of a few days, these averages are routine:
- $43.58/hour
- $36.19/hour
- $50.13/hour
- $51.02/hour
- Now that the tipped minimum is being eliminated, more employers are going to simply add a service charge automatically. This service charge will go directly to the employer as income that they can distribute as wages however they see fit. The law differentiates between Service Charges and Tips, employers can have their way with a service charge, not a tip.
- Service charges are taxable, Tips are not. This is a huge win for the City of Chicago tax base, which I'm not entirely opposed to.
- There are a lot of servers who are going to take a giant pay cut. Like, most of them.
Yay?