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Illinois clarifies tip rules

10/03/19

Author: ADP Admin/Sunday, September 29, 2019/Categories: Compliance Corner , State Compliance Update, Illinois

Illinois has enacted legislation (House Bill 3405) that clarifies the state's rules on tips received by employees. House Bill 3405 takes effect Jan. 1, 2020.

House Bill 3405 makes clear that tips are the property of the employee, and employers are prohibited from keeping tips. It also provides that "failure to pay gratuities owed to an employee more than 13 days after the end of the pay period in which such gratuities were earned" violates state law.

The law doesn't prohibit tip pooling among tipped employees. The law also doesn't prohibit employers from withholding a proportionate amount of any credit card processing fees from tips, provided that the amount withheld does not exceed the proportion of the amount of the tip to the overall bill.


Compliance Recommendations:

Employers with tipped employees should ensure compliance with House Bill 3405.

Please contact your dedicated service professional with any questions.

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Tags: 10/03/19

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