This Week in Springfield – 101-04

February 15, 2019

Despite bi-partisan opposition, Thursday afternoon the Illinois House passed Senate Bill 1 (Sen. Kimberly Lightford, D- Westchester/Rep. Will Guzzardi, D- Chicago) on a partisan roll-call of 69-47-1. It is important to note five House Democrats joined all the House Republicans in opposition. Nevertheless, SB 1 will now go to Governor JB Pritzker’s desk where a quick signature is expected.

IRMA would like to thank the IRMA members who repeatedly made contact with their State Senators and State Representatives. It did have impact and while history will never record how close we came to achieving genuine compromise, we know.

IRMA approached the issue with two viable compromises  and IRMA was willing to stand in public support of both. One of the compromises got everyone to $15 but gave suburban and downstate employers the same time to ramp up that Chicago employers have been given. Despite the fact the same proponents advocating for SB 1 in Illinois supported both alternatives IRMA put on the table when they were adopted in other states, there was no true effort to compromise. One of IRMA’s alternatives agreed to get everyone to $15 but gave suburban and downstate employers the same time and consideration that Chicago employers have been given. To no avail.

The press coverage was voluminous and very much in favor of the compromises IRMA, and a broad coalition of employer organizations led by IRMA, offered.

Nevertheless, the other side chose differently and had the advantage.

As passed by the Assembly, SB 1 amends the Illinois Minimum Wage Law to phase-in the $15 starting wage over five years:

18 years and older Under 18 years of age*
YEAR WAGE YEAR WAGE
1/1/2020 $9.25 1/1/2020 $8.00
7/1/2020 $10.00 7/1/2020
$11.00 $8.50
1/1/2022 $12.00 $9.25
1/1/2023 $13.00 $10.50
1/1/2024 $14.00 $12.00
1/1/2025 $15.00 $13.00

While it looks like six-years, it is, in fact, five. The first three increases occur within 367 days – one year for the planning purposes of employers.

Additionally, the legislation contains a tax credit, allegedly for small employers. However, it excludes many small employers. For example, the following are not eligible for the credit:

  • Any employer with more than 50 full-time equivalent employees in their entire operation – not by location. NOTE: The legislation does not define how many hours constitute full-time. That will be determined in rules therefore employers have no way of knowing how to calculate the potential credit.
  • Any employer who has more than one franchised store OR files taxes as part of a unitary group.
  • Any employer who pays more than the minimum wage at that time.
  • Any employer whose average wage is less in the current quarter vs. the quarter the year before. Therefore, if an employer is forced to lay-off or cut hours to afford the rapid rise to $15, she/he would not be eligible for the credit.

For Chicago employers, you will follow the city of Chicago’s minimum wage until January 1, 2024 when the state’s starting wage will be higher. Of course, this would change if the city increases their wage again. Proponents are already talking about wanting to increase Chicago’s wage to $17 or $20.

To make matters worse, as currently written, no employer is eligible because the bill contains an error. While the sponsor was informed of the error multiple times, he refused to repair the bill because he was concerned about sending it back to the Senate. It is widely anticipated a trailer bill will occur at a later date to repair.

The tip credit remains the same at 40%.

The training wage remains the same at $0.50 less per hour than the minimum wage in effect at that time through the first 90-days of employment.

Finally, penalties for wage theft are increased substantially. Civil damages are increased from damages to treble damages; damages increase from 2% of underpaid wages to 5%; an additional $1,500 must now be paid to the Department of Labor. These damages are on top of the existing 20% of damages that must be paid to the Department.

IRMA would like to the Senate and House Republicans who did such a great job of noting the way SB 1 discriminates against suburban and downstate employers, the economic advantages Chicago enjoys vis-a-vis those same regions, and the substantial additional impact taxpayers will bear due to the costs on local governments, park districts, K-12 schools, higher education, social services, etc. Specifically, IRMA thanks House Republican Leader Jim Durkin, Representatives Mark Batinick, C.D. Davidsmeyer, Tom Demmer, David McSweeney, former restauranteur Mike Murphy, Steve Reich, Grant Werhli, Keith Wheeler, and many more not only for their floor comments but leadership in committee over multiple hearings.

IRMA would also like to thank the four Democrats who voted “no” and one who voted ‘present’. They are Representatives Monica Bristow (D- Alton), Terra Costa-Howard (D-Lombard), Jerry Costello (D-Red Bud), and Mary Edly-Allen (D-Libertyville). Additionally, Representative Stephanie Kifowit (D-Aurora) voted ‘present’ expressing her support for an increase but opposition to the way it was done in SB 1.

Today is the bill filing deadline for both the House and Senate.  This deadline is arbitrary as the filing deadline for an individual bill may be extended and amendments can be continuously filed during the remainder of Session. As of this writing the following is a sample of the bills filed:

Paid Sick Leave MandateHB 2343 (Rep. Jehan Gordon-Booth, D-Chicago) creates the Healthy Workplace Act and requires employers to provide at least 5 paid sick leave days to all employees in Illinois.

Confidential Sales Tax Information CollectionHB 2947 (Rep. Mike Zalewski, D-Riverside) allows a third-party contingency fee auditor access to the sensitive sales tax information of local businesses. This initiative failed in the Senate two years ago.  It failed in the House last year after it came to light that Azavar, a private auditing firm, was illegally collecting businesses’ private sales tax information from municipalities.

Sharps Take-back MandateHB 3246 (Rep. Greg Harris, D-Chicago) requires retailers to install boxes to allow residents to put their used needle in. It requires an employee to receive training to handle and dispose of the needles. It also allows municipalities to require retailers within their jurisdiction to provide sharps take-back boxes.

Mileage TaxHB 2864 (Rep. Marcus Evans, D-Chicago) creates the per-mile road usage charge pilot program. The pilot programs charges a tax for every mile driven on Illinois roads.

Data Broker Registration ActHB 2872 (Rep. Celina Villanueva-D, Chicago) creates the Data Broker Registration Act. Requires a data broker to annually register with the Secretary of State. Defines data broker as a business or unit of a business, separately or together, that knowingly collects and sells or licenses to third parties the brokered personal information of a consumer with whom the business does not have a direct relationship.

Hiring MandateHB 3056 (Rep. Sonya Harper, D-Chicago) provides that if two employees are equally qualified for a position and one has an arrest record, the employer shall not take an adverse action against the employee with the arrest record.

App Privacy Protection ActHB 3051 (Rep. Carol Ammons, D-Champaign) creates the App Privacy Protection Act and requires an entity that owns, controls, or operates a web site, online service, or software application to identify in its customer agreements or applicable terms whether third parties collect electronic information directly from the digital devices of individuals in Illinois who use or visit its web site, online service, or software application. Requires the disclosure of the names of those third parties and the categories of information collected.

SNAP Wage MandateHB 3220 (Rep. Mike Halpin, D-Rock Island) requires an employer to pay an employee the difference between their wages and the amount the person receives from the Supplemental Nutrition Assistance Program (SNAP)

Personal Tobacco LicenseHB 3178 (Rep. Deanne Mazzochi, R-Westmont) raises the minimum age for the purchase, possession, and use of tobacco products, electronic cigarettes, and alternative nicotine products from 18 years of age to 21 years of age. It authorizes the Secretary of State to issue a smoking license to a person who: (1) is at least 18 years of age but under 21 years of age; (2) has completed the 8-hour online educational program regarding the dangers and consequences of smoking as verified by the Department of Public Health; and (3) has paid a $50 fee to the Secretary of State.

Restaurant Anti-Harassment Training MandateHB 3351 (Rep. Anne Williams, D-Chicago) creates the Restaurant Anti-Harassment Act and requires restaurants to have a sexual harassment training policy and provide training to all employees.

10 Cent Plastic Bag TaxHB 3335 (Rep. Anne Williams, D-Chicago) places a $.10 fee on all carryout bags–plastic, paper or compostable–used at a retailer by a consumer.

Plastic Straw BanHB 3379 (Rep. Michelle Mussman, D-Schaumburg) creates the Plastic Straw Ban Act and prohibits a bar, restaurant, or any business that sells food to the public from providing a customer a single-use plastic straw unless requested by the customer.

Female and Minority Board Mandates HB 3394 (Rep. Chris Welch, D-Chicago) requires no later than the close of the 2020 calendar year, a publicly held domestic or foreign corporation whose principal executive offices are located in Illinois shall have a minimum of one female director and one African American director on its board of directors.