Tipped hospitality workers across Chicago will get a pay raise starting Monday, July 1, as a hotly debated city ordinance goes into effect, raising the tipped minimum wage from $9.48 to $11.02 an hour.
The ordinance, which follows a historic vote by Chicago City Council members in October 2023, will phase out the city’s tipped minimum wage — essentially a subminimum wage plus tips — and increase it by 8% each year for five years until it matches the standard wage, which starts Monday at businesses with four or more employees and rises to $16.20 from $15.80 an hour.
Additionally, changes to paid vacation also went into effect: Employees who work more than 80 hours in any 120-day period are now entitled to five paid vacation days and five paid sick days. The 10-day total is a compromise from the 15-day total proposed last year.
Chicago Mayor Brandon Johnson His team’s efforts to “make Chicago the most worker-friendly city in the country” are a culmination of the efforts of activists like progressive groups. Fair wages Despite opposition from officials including the governor and Johnson, who has made a wage hike a pillar of his platform, the wage hike sparked a contentious debate last year. At the start of the pandemic, local hospitality workers began speaking out more loudly about the challenges of relying on tips to survive. But opponents, including some members of the Illinois Restaurant Association, countered, worrying that increased operating costs would force restaurants to raise prices, driving away customers and hurting their businesses in the long run.
Johnson’s 2023 mayoral victory was key, said national labor activist Saru Jayaraman, founder of One Fair Wage. By August, Jayaraman declared the city’s ordinance was all but passed. But in September, opponents threw a Hail Mary by proposing a new association-backed ordinance that would raise Chicago’s tipped minimum wage to $20.54 an hour for restaurants that offer tip deductions, the highest in the nation.
But within days, the two sides reached a compromise, with the restaurant association dropping its opposition to the revised ordinance that would set aside $500,000 in private funds to help small restaurants transition and address the need for unionized restaurants to keep wages low per worker contracts. The move cleared the way for activists and advocates to declare victory ahead of a City Council vote.
Many across the country are keeping their eyes on Chicago to see how the ordinance will affect the city’s hospitality industry. Seven states – Alaska, California, Minnesota, Montana, Oregon and Washington – have long abolished the tip deduction, and Washington, D.C., voted to raise its tipped minimum wage from $5.35 to $10 an hour in May 2023. This year, lawmakers in 17 states, including Illinois, have proposed raising the tipped minimum wage, but no bills have been passed yet, according to the House of Representatives. Sun Times.
