Businesses using minimum wage increase as employee raises not illegal
October 10, 2007
After the statewide minimum wage increase took effect on July 1, 2007, some businesses treated the boost like a raise, which has made some question the legality of the issue.
Gov. Rod Blagojevich signed legislation that increased minimum wage from $6.50 per hour to $7.50 per hour statewide, with further 25-cent increases until reaching $8.25 in July 2010, according to a June 29 press release.
Terrence Bishop, associate professor of management, said there would not be anything illegal about a company using the increase as a type of raise, since there are no laws or state guidelines to require companies to provide pay increases. Bishop added that it would not be a wise decision.
It would only apply to people who are below minimum wage, which is a relatively small number of employees in most companies, Bishop said.
Bishop also said that some companies feel at times they must preserve the pay difference because it may lead to increment pay increases all across the board due to the statewide minimum wage increase.
“I think it’s unfair that they’ll mask it as a raise because you think that you are getting something great and really it’s required by the state,” said freshman history major Sean Gerold.
Freshman Spanish major Christopher Guy disagreed.
“I think it should be a promotion for the skilled workers but not the unskilled workers,” Guy said.
Blagojevich also reminded Illinoisans if they work for the minimum wage and are not receiving it, they should call the Illinois Department of Labor’s hotline at 1-800-478-3998 so the state can help them get the wages they’re owed.