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CHICAGO – Servers, bartenders and other tipped workers across Chicago will likely wait at least two more years for their next city-mandated raise after a key City Council committee struck a compromise Tuesday between restaurant owners and labor advocates.
The Workforce Development Committee voted unanimously to advance an ordinance that freezes the tipped minimum wage at its current $12.62 per hour through 2028, pushing back the city’s planned phase-out of the so-called “tip credit” by two full years. The measure now heads to the full City Council for a final vote on May 20.
In a notable shift, Mayor Brandon Johnson — who vetoed a similar freeze just weeks ago — signaled he will back the new version. A spokesperson said the compromise “preserves the phaseout and the security it has brought tipped workers while addressing legitimate industry concerns around the immediate impact of global instability on business costs.”
What the Compromise Actually Does
The ordinance, drafted by freshman Ald. Walter “Red” Burnett (27th Ward), whose ward includes the restaurant-heavy Fulton Market district, sets a new, slower timeline for bringing tipped workers up to the regular minimum wage:
Tipped workers would see no city-ordered raise on July 1, 2026, or July 1, 2027. The next bump arrives July 1, 2028, when employers must pay 84% of the standard minimum wage. That rises to 92% in 2029, and finally hits 100% on July 1, 2030.
Smaller businesses — those with between three and 20 employees — get even more breathing room, with a final deadline of July 1, 2033, to reach full minimum wage parity.
For context, Chicago’s standard minimum wage currently sits at $16.60 per hour and is scheduled to rise again on July 1 based on inflation. Tipped workers must earn at least $12.62 from their employer, with tips expected to cover another $3.98 per hour.
A Rare Moment of Agreement
What makes Tuesday’s vote unusual is that both sides of a years-long fight publicly accepted the deal — even if neither loved it.
“They want to increase their wages, but they don’t want to lose their jobs,” Burnett told the committee before the vote, describing weeks of negotiations with restaurant operators and labor organizers. “This allows for more time for it to be done right.”
Sam Toia, CEO of the Illinois Restaurant Association, called the measure “not ideal” but said it offers “a critical lifeline to help restaurants sustain their operations during these challenging economic times.” His group has long opposed eliminating the tip credit entirely, but he told the committee, “We can support the substitute.”
Saru Jayaraman, president of the national One Fair Wage campaign, said her organization could “live with” the delay — while warning aldermen they were effectively freezing pay for some of Chicago’s lowest-paid workers during a period of rising inflation. She added that this “should be the end of the conversation” about further delays.
Ald. Jessie Fuentes (26th Ward), who authored the original 2023 ordinance phasing out the tipped minimum wage by 2028, said she remains committed to the broader goal. “I hope this is the last time we have to litigate this in the city of Chicago,” she said, “because both workers and business owners deserve the very best of us.”
How Chicago Got Here
The compromise marks the third major battle over Chicago’s tipped minimum wage in three years.
The City Council voted in 2023 to gradually eliminate the tip credit — the rule that lets employers pay tipped workers less than the standard minimum wage as long as gratuities make up the difference. That made Chicago the largest U.S. city to join a small but growing list of states with the same policy, including California, Oregon, Washington, Nevada, Minnesota, Montana, Alaska and the U.S. territory of Guam. Washington, D.C., paused its own phase-out last June.
In March, the Council reversed course in a 30-18 vote, attempting to freeze the tipped wage at 76% of the standard minimum. Johnson vetoed that measure, and supporters fell short of the votes needed to override him. The mayor called the failed override “a victory for working people across Chicago” and accused critics of running “a well-organized, corporate-funded effort to blame rising costs on Black and Brown workers.”
Johnson, who campaigned on ending the tipped minimum wage and faces re-election in less than a year, has consistently framed the fight in racial and gender terms, arguing the subminimum wage is “a vestige of slavery” that disproportionately harms Black and Latina women working in the service industry. He has also pointed to research suggesting tipped workers face higher rates of sexual harassment and wage theft than other employees.
Restaurant owners counter that the phased increases have cut into already razor-thin margins, forcing layoffs and stalling expansion plans. Johnson has previously rejected those claims, noting there is no evidence restaurants have closed at a higher rate since the 2023 vote.
What Happens Next
The full City Council is scheduled to take up the measure on May 20. With unanimous committee support, mayoral backing and rare buy-in from both the restaurant lobby and the labor coalition that has championed the original phase-out, passage appears all but certain.
If approved, Chicago’s tipped workers will continue earning $12.62 per hour from their employers until at least mid-2028 — a freeze that effectively delays the full elimination of the tipped minimum wage until 2030, with smaller restaurants getting until 2033 to comply.
