In another installment of our Get In Shape For Summer series for employers, the topic of what to pay seasonal or summer employees often arises. Three general rules apply to public and private employers alike as follows:
1. You Must Pay Minimum Wage. This is true at least for all your summer employees, although the minimum wage rate varies depending on if the employee is over or under the age of 18. Currently the state minimum wage rate in Illinois is $8.25 for employees over the age of 18. Employers are allowed to pay $.50 less per hour to employees who are under the age of 18. Employers should note that while the state has set a minimum wage rate, some municipalities have set that rate higher for employers within their community. Check your local ordinances to ensure that you’re paying the proper minimum wage rate.
2. You Can Take Tip Credit: If your summer help is working in an assignment where employees regularly receive more than $30 per month in tips, employers are able to offset their minimum wage payment to allow for a tip credit. The regulations to the federal Fair Labor Standards Act describe this as follows:
Tip Credit: Section 3(m) of the FLSA permits an employer to take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13) and the federal minimum wage. Thus, the maximum tip credit that an employer can currently claim under the FLSA is $5.12 per hour (the minimum wage of $7.25 minus the minimum required cash wage of $2.13).
Tip Pool: The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), bussers, and service bartenders. A valid tip pool may not include employees who do not customarily and regularly received tips, such as dishwashers, cooks, chefs, and janitors.
3. All Illinois Employers Must Pay Overtime After 40: The FLSA still contains an exception to mandatory time and one-half overtime for hours worked over 40 in a workweek for certain seasonal employees in amusement parks and park districts. For a number of years Illinois minimum wage and overtime laws mirrored the federal law on this topic. A number of years ago, though, the Illinois law was amended to eliminate that exception with the result that all summer employees must be paid time and one-half for hours worked over 40 in a week. This includes park districts and other public employers with a park department, swimming pool, golf course or the like. While the Illinois law has existed for a number of years, we find that some employers remain confused about their obligation because of the more lenient requirements of the federal law.
Follow these wage requirements and your workplace will be in shape for summer.