Am I required to Pay Minimum Wage?

February 12, 2012 - 3 minutes read

Minimum wage is the lowest hourly, daily or monthly amount that employers can legally pay to workers and it is also the lowest wage at which workers may sell their labor. Although this is what the law requires, there are differences of opinion about the benefits and drawbacks of a minimum wage.

Supporters of minimum wage say that it increases the standard of living of workers, reduces poverty, and forces businesses to be more efficient.? If minimum wage were high enough to actually achieve raising the standard of living it would result in higher unemployment, discrimination toward those who are inexperienced, handicap, or lesser-skilled, and benefit? the better skilled workers? They would argue that it forces employers to raise the prices of their products, causing inflation.?? Some would say that minimum wage in the U.S. is helping other countries with a very low or non-existent minimum wage (China, for example) to out-sell domestic companies.

Minimum wage in Illinois is $8.25 per hour ? a dollar more than the federal minimum wage. ?If you live in a state that has a minimum wage set higher than the Federal minimum wage, you are entitled to be paid the higher wage.

Minimum wage in Illinois for tipped employees is $4.95 per hour, higher than the federal minimum wage of $2.13 per hour. The Illinois tipped wage applies to employees like waitresses, waiters, bartenders, valets, and other service employees who earn more than $30 in tips a month. ?Including tips and cash wages, all tipped employees must still earn at least the Illinois Minimum Wage of $8.25 per hour. If an Illinois employee does not earn at least $8.25 including tips in any given hour of work, their employer must make up the difference in cash.

For the first 90 days, all adult workers 18 and over in the state of Illinois can be paid $7.75 an hour. That temporary subminimum wage is legal for 90 calendar days after your start date, not 90 working days. ?After the initial 90 days, the minimum wage must increase to the regular $8.25 an hour.

Which Workers Are Exempt From the Federal Minimum Wage?

Regardless of the state in which you conduct business, federal law does not require you to pay the following workers the federal minimum wage:

?Independent contractors (only employees are entitled to the minimum wage)

See requirements for eligible 1099 contractor.

?Outside salespeople (a salesperson who works a route, for example)

?Workers on small farms

?Switchboard operators employed by phone companies with no more than 750 stations

?Employees of seasonal amusement or recreational businesses

?Employees of local newspapers having a circulation of less than 4,000

?Newspaper deliverers

?Apprentices, students, and learners, as defined by federal law.

 

For further information, click here. 820 ILCS 105/4a (2).