The Chicago City Council voted to make America's third largest city the latest to get rid of subminimum wages for tipped workers. Restaurants are now required to pay the city's current $15.80 minimum wage for servers, bartenders and other workers in the industry.
The One Fair Wage ordinance, introduced to the City Council over the summer, is backed by Chicago mayor Brandon Johnson, who helped negotiate a compromise bill with the Illinois Restaurant Association. The legislation had more than two dozen co-sponsors.
The minimum wage for tipped workers will increase 8% starting July 1, 2024. Wages will continue to rise by 8% year over year until 2028, when tipped workers reach the full minimum wage.
Currently the subminimum wage in Chicago ranges from $9 to $9.48 an hour plus tips.
Restaurant servers and other tipped workers are paid a "subminimum wage" which acts as a base pay and is bolstered by tips.
The Fair Labor Standards Act (FLSA) sets the minimum base wage at $2.13 per hour, but many states mandate a higher level, according to the Department of Labor. In some states, employers must pay tipped employees the full state minimum wage before tips.
In Chicago the subminimum wage ranges from $9 an hour for workers at smaller companies up to $9.48 an hour for those working at larger companies. Although the subminimum wage falls below the city's regular minimum wage, pay is expected to be boosted by tips from customers.
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