Minimum Wage

[tsbco1a]

State is Illinois.
A small hair salon that has about 6 employees. Some of the employees are commission/tipped employees. Others are hourly.
The hourly employees are paid minimum wage. Are the commission/tipped employees subject to minimum wage laws as well even though the annual business does less that $500,000 annually (approx. $100,000)?

 

[LdiJ]

State is Illinois.
A small hair salon that has about 6 employees. Some of the employees are commission/tipped employees. Others are hourly.
The hourly employees are paid minimum wage. Are the commission/tipped employees subject to minimum wage laws as well even though the annual business does less that $500,000 annually (approx. $100,000)?

If they are employees, and not just renting booth space, then yes they are subject to minimum wage. However, their commission plus their tips are added together, and as long as those equal more than minimum wage for the day, all is good.

 

[FlyingRon]

If they are employees, and not just renting booth space, then yes they are subject to minimum wage. However, their commission plus their tips are added together, and as long as those equal more than minimum wage for the day, all is good.

And that the portion of their wages before tips is at least the threshold ($4.95 under Illinois law) the "tip credit" can make up the rest of the $8.25 minimum wage.

 

[tsbco1a]

And that the portion of their wages before tips is at least the threshold ($4.95 under Illinois law) the "tip credit" can make up the rest of the $8.25 minimum wage.

Thanks. So the $500,000 is not applicable?

 

[LdiJ]

Thanks. So the $500,000 is not applicable?

No, it is not applicable.

 

[cbg]

It's not, "businesses that earn under $500,000" that are exempt from the FLSA. It's "businesses that earn under $500,000 AND do no interstate commerce" that are exempt. And "doing interstate commerce" has been defined so broadly that virtually all companies are subject to the FLSA under that provision.

 

[FlyingRon]

The other reason $500,000 has no bearing is that the wage law I was referring to isn't the federal one. The state of Illinois has a much more restrictive law. The tip credit amount allowable is reduced and so is the credit to lower the minimum wage if you are providing health insurance. As long as the employer has four or more employees (and isn't one of the protected businesses like agriculture, universities, etc...) Illinois's minimum wage law applies.

 

[cbg]

^^^Like

(I want the like buttons back!)

 

[tsbco1a]

The other reason $500,000 has no bearing is that the wage law I was referring to isn't the federal one. The state of Illinois has a much more restrictive law. The tip credit amount allowable is reduced and so is the credit to lower the minimum wage if you are providing health insurance. As long as the employer has four or more employees (and isn't one of the protected businesses like agriculture, universities, etc...) Illinois's minimum wage law applies.

Thanks very much!