Compromise reached on plan to eliminate lower minimum wage for tipped workers in Chicago
CHICAGO (CBS) -- In a compromise with Mayor Brandon Johnson, the Illinois Restaurant Association has agreed to a plan to phase out the lower minimum wage for tipped workers over the next five years.
The City Council Workforce Development Committee originally had been set to vote Wednesday on a plan to eliminate the lower minimum wage for tipped workers in two years, but in an 11th-hour deal with the mayor and his City Council allies, restaurants agreed to back the plan with a longer runway to adjust to the higher costs.
"My administration has delivered a compromise eliminating the sub-minimum wage, which is a huge step forward in bringing fair wages to food and restaurant workers. Looking forward to continued partnership so both workers and businesses can thrive," Mayor Johnson said in a statement posted on X, formerly known as Twitter.
The Illinois Restaurant Association had expressed concerns that eliminating the lower minimum wage for tipped workers in just two years could put many small restaurants out of business. They had proposed instead to raise the minimum wage for tipped workers to $20.54 an hour by Jan. 1, 2025, but only for businesses with $3 million or more in annual revenue.
Johnson's allies swiftly rejected that plan, but continued to negotiate with the Illinois Restaurant Association on a longer phase-in period for eliminating the lower minimum wage for all tipped workers.
Activists with One Fair Wage, which has been pushing for years to eliminate the lower minimum wage for tipped workers, applauded the five-year compromise.
"Today's announcement marks a seismic shift in the movement to end the subminimum wage for tipped workers nationwide. We aren't just celebrating a policy change, we are witnessing a surging momentum for worker power. This breakthrough is an example of what is possible when workers, advocates, and elected leaders with the political courage stand together," the group said in a statement.
If approved as expected, the minimum wage for tipped workers would match the full minimum wage by July 1, 2028. Currently, the minimum wage in Chicago for most workers is $15.80 per hour, while the minimum wage for tipped workers is $9.48 an hour. If an employee's wages and tips don't total the full minimum wage, employers are supposed to make up the difference.
Originally, Johnson backed a plan that would have seen the tipped minimum wage rise by $3 an hour on July 1, 2024, and rise to the full minimum wage one year later. It was not immediately clear how the gradual increase in the minimum wage for tipped workers would be phased in over the new five-year period.
If approved by the Workforce Development Committee as expected on Wednesday, a vote by the full City Council could come on Oct. 4.
The Illinois Restaurant Association released a statement:
"We want to thank our members, partners, and Chicago's restaurant operators for standing with us to find a compromise that will give our city's restaurants the time they need to adjust to operating within these new parameters. Change is always difficult, but negotiations require concessions by both sides to find a solution. We believe this amended ordinance does that, and while it is not what we originally fought for, it provides restaurant operators time to adjust to the new system so their restaurants can stay open, and their servers remain well compensated."
