City Council freezes pay for tipped workers at 76% of minimum wage to help struggling restaurants

Chicago’s tipped workers could have their hourly pay frozen at 76% of the city’s minimum wage, thanks to a City Council vote Wednesday that throws an economic bone to restaurants, but sets the stage for Mayor Brandon Johnson’s third veto.

At a time when Chicago is becoming increasingly unaffordable for working-class residents, Johnson said this week it would be “not only tone deaf, but irresponsible” for the City Council to stop what was supposed to be a five-year phase-out of the subminimum wage for tipped workers.

The mayor counts the phase-out  as one of the signature wins of his progressive agenda. He plans to fight to keep it — even if it opens a new front in his ongoing battle with an emboldened City Council majority that rejected his proposed corporate head tax.

Thirty-four votes are needed to override a mayoral veto. The vote to freeze the phase-out was 30 to 18.

Johnson called Wednesday's vote "shameful" and said he was not about to "stand idly by and watch Black and Brown women suffer at the hands of corporate interests." He added, "If I've got to veto something to make sure that Black and Brown women are protected, then veto it is."

The mayor said Lt. Gov. Julianna Stratton won the Democratic primary for the U.S. Senate on a promise to work to raise the minimum wage to $25-an-hour. "There is like a real disconnect going on in City Council now. It's like an alt-universe... The entire world is calling for affordability and raising wages, and this City Council just took raises away from Black and Brown women."

Johnson has already vetoed an ordinance that would have empowered police to issue snap curfews and another that banned the sale of most hemp products in Chicago. This time, he’s almost certain to have a bigger fight on his hands.

The Illinois Restaurant Association has spent the last year building support to stop the five-year phase-out and freeze the so-called “tip credit” at 24% of Chicago’s minimum wage, which now stands at $16.60 an hour.

Without the freeze, tipped workers now paid $12.62 an hour — or 24% less than the $16.60 paid to hourly Chicago workers who do not receive tips — would receive a raise to 16% of Chicago’s minimum wage. That amount is re-set every July 1. With the freeze, they would still receive a raise, but it would be capped at 76% of whatever the minimum hourly wage turns out to be.

Restaurants fighting for survival have joined the campaign armed with surveys that underscore what they claim is an urgent need for economic relief for an industry that has not fully recovered from the pandemic. Those surveys show that nearly 500 Chicago restaurants closed during the first half of 2025, and that the total workforce at the city’s full-service restaurants remains 7,800 jobs below pre-pandemic levels.

Customers also are paying higher prices for reduced service. Nearly 90% of restaurants surveyed say they’ve raised menu prices, while 72% have cut staff and 79% have reduced employee hours.

Far South Side Ald. Anthony Beale (9th) said Wednesday he’s convinced that, without a break, more restaurants that are the lifeblood of Chicago neighborhoods will be forced to either close altogether or move to tax-friendly suburbs. That would mean more gaping holes in neighborhood commercial strips that already have many vacant storefronts, Beale said.

"Businesses are closing the doors. It's okay to admit we were wrong. We need to correct the wrong to help save businesses on life support," he said.

Mayoral allies claimed that the affordability crisis now dominating politics in Chicago and around the nation makes it precisely the wrong time to deny a workforce in an industry dominated by women of color the right to earn at least as much as their counterparts in other industries.

"This is a huge mistake, you all," said Ald. Anthony Quezada (35th), whose parents were restaurant employees. "There is a real honest rage coming from working class people. We are putting the most vulnerable workers at risk. That is a shame, you all."

Progressive firebrand Byron Sigcho-Lopez (25th) was virtually screaming at his colleagues.

"It's unbelievable that we're even discussing this. Have you seen what inflation looks like for tipped workers?" he said. "One of the best things that this City Council has done is actually support these tipped workers so they have a dignified wage that, even then, cannot keep up with inflation... We've got to do more for small businesses. But not at the expense of tipped workers."