UPDATE 11/12/2019 — in 2018, changes were made by the Department of Labor to allow tip pooling with back-of-house employees as long as the state does not have more restrictive laws. This article does a great job of summarizing the changes:

Do You Know Where Your Tip Money Is Going? – Eater

In recent discussions with clients and friends about this year’s change in Chicago minimum wage for tipped versus non-tipped employees (and how that intersects with minimum wage rules for tipped employees at the Federal level or in other states), as well as conversations about restaurant “service charges”, and how they differ from tips… I realized that many folks — even restaurant owners — don’t understand how tipping works from a business perspective, and may not be reporting their tips — or paying their employees — appropriately.  I found this particular Chicago Tribune article from last year to give an especially good overview explanation:

How Restaurant Tipping Works – Chicago Tribune

Another site, the “Wiser Waitress,” writes from the perspective of employees — who unfortunately, often are misinformed or uninformed about their rights, about tip pools, about tracking and reporting and paying taxes on their tips.  This site is not as well-written, and it’s not an Illinois-specific set of information, but it does cover many of the issues that tend to be sticky points.  I also find it helpful to read from the angle of someone who is being taken advantage of — because, in my business, we’re always looking at the poor restaurant owner, who has to pay their employees more than they pay themselves.  It’s interesting to see how waitstaff see it.

The Wiser Waitress – Wages & Tips

Lastly, but in some ways most importantly, the Illinois Restaurant Association has an excellent FAQ regarding various governmental, tax, and labor requirements that apply to restaurants.  This organization is well-worth a membership if you are a restaurant owner or someone who works with restaurants.  They offer different membership types with different benefits, and their website is quite informative:

Illinois Restaurant Association FAQ

Tipping, service charges, minimum wage, front of house, back of house… it’s all substantially more complex than you’d think.  Make sure to learn the rules, track your tips (employees), tip payouts (employers), and educate others wherever you can.

UPDATE: I came across an excellent, two-part, detailed article from the Restaurant Accounting pro herself, Stacey Byrne, on the topic of “Accounting & Payroll Issues for Restaurant Tips and Service Charges” (Part One & Part Two), and want to share it here for you as well. Must-read resources for anyone doing restaurant accounting!