Business
Plan Would Delay the Phaseout of Tipped Minimum Wage in Chicago. What Business Owners, Advocates Are Saying
The Chicago City Council on Wednesday is set to vote on a compromise measure to delay the phaseout of the city’s tipped minimum wage, even after Mayor Brandon Johnson’s March veto.
The compromise, drafted by Ald. Walter “Red” Burnett (27th Ward), would give business owners an additional two years before they must pay tipped workers the full minimum wage.
Businesses with more than 21 employees, under the new measure, would have to comply with the ordinance by 2030. Businesses with between three and 21 employees would have to comply by 2033.
The proposed measure would also mean that tipped workers would not receive their yearly increases this year or the next, with the next mandated wage increase taking place July 1, 2028.
Currently, businesses are required to pay tipped workers $12.62 per hour, with tip revenue ideally covering the remaining $3.98 per hour.
The phaseout, approved by City Council in 2023, originally included a gradual increase in the percentage that businesses would be mandated to pay their tipped workers until they hit the current minimum wage.
‘Withstand the Rising Costs of Everything’
Christina Gonzalez, member of the Illinois Restaurant Association and co-owner of Los Comales restaurants, said “although it’s not an ideal proposal for us, we feel that it is less harmful and a little more equitable for restaurants to be able to withstand the rising costs of everything.”
Gonzalez said that raising wages for tipped workers has already presented challenges in paying back-of-house staff. She has had to raise prices, which lowers the amount of seats in her restaurants, lowering the amount of hours for tipped servers.
Gonzalez described the restaurant business as a delicate atmosphere and said she’s afraid it could be thrown off balance with the elimination of the tipped minimum wage.
She said the city of Chicago is failing to track the number of businesses that have closed, ultimately painting an incomplete picture of how the restaurant industry is doing.
The Illinois Restaurant Association reported a loss of 2,100 employees and the closure of nearly 500 restaurants in 2025 alone, but it remains unclear whether the tipped minimum wage phaseout contributed to that number.
Gonzalez said her employees rarely make under the minimum wage, with an exception of snowstorms and certain outliers throughout the year, questioning the necessity for a phaseout in the first place.
Moving forward, Gonzalez said, she hopes for collaboration with the city to ensure more protections for restaurants and small businesses.
‘The City Council Spoke Very Loudly’
Richard Rodriguez, state director for Illinois Service Workers United and national policy director with the One Fair Wage campaign, said he is “very excited that the ending of the subminimum wage is still intact. We had this debate back in 2023. The City Council spoke very loudly at that time — ending the subminimum wage was a priority — and I’m happy that we’re coming back to the same conclusion.”
Rodriguez said the proposed two-year delay in mandated raises for workers could have a real impact and effectively serve as a “pay cut” amid the rising cost of living.
If the motion passes Wednesday, Rodriguez said he wants the end of the tipped minimum wage protected.
Rodriguez said there needs to be strong enforcement around ensuring workers are receiving the wages they are owed; their tips remain additional income and not a “subsidy for low wages”; and there are protections against retaliation for staff who support ending tipped minimum wage.
Rodriguez said the history of the tipped minimum wage has a legacy of racial and gender discrimination, disproportionately impacting women of color, immigrants and those living paycheck to paycheck. He said that history has created a power imbalance that he believes needs to be corrected by paying workers what they are owed.
