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How tips impact an employee’s wages

On Behalf of | Mar 16, 2021 | Wage & Hour Laws

A paycheck is the reason that most Chicago workers have jobs. Without pay, individuals would likely choose to do other things besides work with their time. However, because individuals must support themselves and their families with their incomes, they work to get paid so that they can provide for those they love.

The minimum wage in Illinois is $11 per hour, but that wage can vary depending on factors such as the age of the worker and the length of time they have been employed by their employer. Whether a worker receives tips for their work can also impact their pay rate. This post will discuss tips in the context of pay in Illinois and how it may alter a worker’s income. No part of this post provides legal advice. Concerns and questions about wage and hour laws should be directed to employment law attorneys in the city.

Why do tipped employees get paid less than $11 per hour?

When an employee works and receives tips, such as in a restaurant setting, their base pay may be less than $11 per hour. That is because their employer may apply a tip credit of up to 40% to their pay to bring their wages up to $11 per hour. Their tips may be used to offset the amount of money that their employer holds back from their pay under the tip credit just discussed.

What happens if an employer holds back an employee’s tips?

Workers are entitled to the tips they earn and receiving at least $11 per hour in wages. If an employer pays less than the minimum wage and does not give their workers tips to cover the tip credit, then they are likely in violation of wage and hour laws. An individual who is being deprived rightfully earned pay should seek counsel from an attorney who can advise them of their rights. Workers deserve to be paid fairly and fully for the work they perform for their employers.