Mayor Brandon Johnson, local leaders and advocates on Monday said a Chicago law that raises the minimum wage of tipped workers, such as restaurant servers, has fueled economic growth in the city, though industry groups claim it hurts businesses and employees.
A city ordinance that went into effect last July “has transformed the lives of so many people. It re-affirms that everyone in Chicago gets to earn a fair wage,” Johnson said at a news conference at TNT Rooftop Restaurant in Austin. “We’re not going to turn back. We’re going to continue to raise the wage of workers.”
The law requires Chicago restaurants to pay tipped workers 8% more annually, until their hourly wage reaches parity with the city’s standard minimum wage in 2028. On July 1, tipped workers’ hourly wages will rise again from $11.02 to $12.62.
The ordinance has sharply divided supporters of the law and the restaurant industry. Labor advocates say tipped workers need higher wages. Restaurant associations say that federal law already ensures a base minimum wage and Chicago’s ordinance will reduce earnings for tipped workers at a time when eateries haven’t recovered from the COVID-19 pandemic.
Samoora Williams, an organizer with advocacy group One Fair Wage, bartended in Chicago from 2019 to 2022. She made a base pay of $10 an hour; additional tips did not bring her up to minimum wage, she said on Monday. Williams wasn’t aware of the federal law mandating employers pay minimum wage if tips don’t bring workers to that baseline.
One Fair Wage organizer James Rodriguez worked as a host at a Lincoln Park Italian restaurant for two years. He said the eatery paid tipped workers minimum wage if they didn’t reach that threshold with tips. But “a lot of workers don’t know they’re supposed to be making that,” said Rodriguez. “There are so many cases of abuse of the law. The city doesn’t have the manpower to go after those restaurants.”
Workers deserve livable salaries, “not wages that keep you in survival mode,” Ald. Jessie Fuentes (26th) said at Monday’s news conference. Business in Chicago is “thriving” and hundreds of new food businesses have opened, said Fuentes, who sponsored the ordinance. “The rhetoric that [the law] is killing the industry is not holding up.”
But industry groups, some restaurateurs and city officials are fighting Chicago’s policy. In May, Ald. Bennett Lawson (44th) proposed an ordinance that would halt the tipped minimum wage law. The proposal is waiting in committee.
“We can no longer deny what the data is telling us — this policy is hurting hard-working restaurant employees and further harming our neighborhood establishments,” Lawson said in a statement on Monday.
In a report released Monday, One Fair Wage said Chicago has issued 856 new retail food licenses since July 2024 and 50% fewer licenses were canceled in 2024, compared to 2023.
But the Illinois Restaurant Association said the industry has lost 5,200 jobs in Chicago from July 1, 2024 through Dec. 1, 2024, citing data from the U.S. Bureau of Labor Statistics.
More than 100 restaurants across the city have closed since 2024. Some Chicago restaurateurs say the ordinance was a factor that forced them to cut jobs.
December 2024 marked the lowest level of full-service restaurant employment since February 2023, said Protect Illinois Hospitality, a coalition of tipped workers and business owners, citing BLS data.
Sam Toia, CEO of the Illinois Restaurant Association, said in a statement on Monday, “It is an incredibly difficult time for restaurants. Many are struggling to stay open. The policy is pushing independent restaurants to the brink, driving up prices for consumers and putting thousands of tipped employees out of jobs. ”
Toia added, “We strongly urge the Chicago City Council to pause and assess the real harm of the tip credit elimination before more damage is done by considering the ordinance recently introduced by Alder Bennett Lawson.”
Fuentes acknowledged that some restaurant owners have raised concerns to her about the tipped minimum wage law and said, “I will help you find resources to make sure you’re successful.”
