Yesterday, Chicago, Illinois alderman voted 44-to-5 to raise Chicago’s minimum wage to $13 an hour by 2019. At that same time, Illinois lawmakers announced they were unable to get the votes necessary to call for a minimum wage increase.
The modification of any minimum wage will likely lead to employment litigation for those employers who fail to keep aware of changes to the applicable rates. Minimum wage lawsuits often arise when employers cause employees to fall below the applicable minimum wage. This can occur in a number of ways. For example, if an employer is paying the applicable minimum wage, but makes wage deductions (for damage, etc.) an employee may fall below the minimum wage. Sometimes employers will misclassify employees as independent contractors in an effort to avoid paying the minimum wage. Other examples include employers making employees work “off the clock” (for example, making them punch out) to avoid paying the applicable minimum wage. As employers and employment lawyers navigate through changes, employment litigation is likely to increase if employers are slow to update their pay rates.
Those opposing minimum wage hikes typically claim it will be a job killer. Those encouraging increases point out that there is a right to earn a living wage. The Department of Labor has an interesting publication on myths about minimum wage increases says, for example:
“Myth: Increasing the minimum wage will cause people to lose their jobs.
Not true: A review of 64 studies on minimum wage increases found no discernable effect on employment. Additionally, more than 600 economists, seven of them Nobel Prize winners in economics, have signed a letter in support of raising the minimum wage to $10.10 by 2016.
Myth: Small business owners can’t afford to pay their workers more, and therefore don’t support an increase in the minimum wage.
Not true: A June 2014 survey found that more than 3 out of 5 small business owners support increasing the minimum wage to $10.10. Small business owners believe that a higher minimum wage would benefit businesses in important ways: 58% say raising the minimum wage would increase consumer purchasing power. 56% say raising the minimum wage would help the economy. In addition, 53% agree that with a higher minimum wage, businesses would benefit from lower employee turnover, increased productivity and customer satisfaction.
Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would hurt restaurants.
Not true: In California, employers are required to pay servers the full minimum wage of $9 per hour – before tips. Even with a recent increase in the minimum wage, the National Restaurant Association projects California restaurant sales will outpace the U.S. average in 2014.”