> This is primarily an accounting and enforcement change.
No, it is not primarily an accounting and enforcement change. Previously the first $6.80/hour in tips were simply donations from customers to the employer, because the worker wouldn't see one additional cent from that. Now, 100% of tips are required to be paid to the workers.
Wage theft is still a massive problem - theft due to minimum wage violations alone are larger than larceny, burglary, and auto theft combined - so enforcement is still an issue, not to mention the risk of retaliation. But this law is a material change for people working tipped minimum wage jobs, not just an accounting change.
And now that they aren't taking the tip credit for waitstaff, that money can be combined into a tip pool and shared with the back of the house, who can then have their wages lowered by the expected share of the tip pool. Which could easily be $6.80/hr/waitstaff of savings.
Or, more explicitly, they could make waitstaff tip out the back of the house $6.80 an hour and lower the back of the house wages that explicit amount.
But maybe the back of the house doesn't make enough money to make it up already. I'm not 100% sure of the economics of running a restaurant.
> And now that they aren't taking the tip credit for waitstaff, that money can be combined into a tip pool and shared with the back of the house, who can then have their wages lowered by the expected share of the tip pool.
Not only is this is completely orthogonal to the change in law that's being discussed, this is also already illegal. Tipped workers in Illinois (and most states) cannot be forced to share tips with untipped back-of-house staff.
I'm not aware of Illinois law, and maybe it is different there. (Edit: As of now, , I see no evidence this is a special Illinois law, instead of being the US law discussed below. I continued the thread because maybe someone can show a citation.)
US federal law says that tipped workers cannot be forced to share tips with untipped back-of-house staff unless the tipped workers are paid normal minimum wage. In which case all non-supervisory staff can be added to the same tip pool.
It does not matter for the federal law if the "normal minimum wage" was legally required or optional.
As for orthogonality, the question was "is the first $6.80/hr of tips subsidizing employer wage obligations". If the server is getting more money from the employer but the chef is getting more money from the servers and less from the employer, it's just an accounting change and the total takehome pay of waitstaff, chef and management/owner remains the same.
> I'm not aware of Illinois law, and maybe it is different there. US federal law says that tipped workers cannot be forced to share tips with untipped back-of-house staff unless the tipped workers are paid normal minimum wage. In which case all non-supervisory staff can be added to the same tip pool.
Okay, but we're talking about Chicago, which is in Illinois, and in Illinois this is illegal.
No, it is not primarily an accounting and enforcement change. Previously the first $6.80/hour in tips were simply donations from customers to the employer, because the worker wouldn't see one additional cent from that. Now, 100% of tips are required to be paid to the workers.
Wage theft is still a massive problem - theft due to minimum wage violations alone are larger than larceny, burglary, and auto theft combined - so enforcement is still an issue, not to mention the risk of retaliation. But this law is a material change for people working tipped minimum wage jobs, not just an accounting change.