Mayor Johnson's veto over freezing tipped minimum wage divides restaurant industry

Some restaurant owners and servers say Chicago’s hotly debated law to increase the tipped minimum wage harms workers and the industry, following Mayor Brandon Johnson's veto of the City Council’s vote to freeze tipped workers’ hourly pay. Supporters of the ordinance want better pay and conditions for workers.

Chicago’s law went into effect in 2024 to increase the tipped minimum wage to parity with the city’s standard minimum wage over five years.

“The recent backdoor effort to pause its implementation is not only harmful to tipped workers — especially Black, Brown and women workers — but also undermines the democratic process,” said Raeghn Draper, organizer with the Chicago Hospitality Accountability & Advocacy Database Project and bartender at Consignment Lounge near Logan Square. CHAAD is part of One Fair Wage, the advocacy group leading a national campaign to end the tipped minimum wage.

But Shanell Oliver, a server at Bronzeville Winery, makes much more with tips. During a 4 1/2 hour shift last Sunday, she made $425 in tips at the upscale South Side restaurant.

“No server is working to make the hourly wage,” she said. Someone could work at a fast-food restaurant to earn minimum wage, she pointed out. 

For Oliver, Chicago’s law increasing the tipped minimum wage amounts to only a few more dollars an hour. Tipped workers are currently paid a base wage of $12.62 an hour, compared to the city’s standard minimum wage of $16.60.

“Servers don’t work for minimum wage. They work for tips,” said Eric Williams, owner of Bronzeville Winery. “That’s not the battle to fight.”

Increasing minimum wages for tipped workers means rising fixed costs for restaurants. That drives some owners to cut staff as well as their hours.

“You end up actually working fewer shifts and making less money,” said Oliver, a single mother of three who has worked as a server for two decades.

Since 2024, Bronzeville Winery has reduced its servers from about 10 to six, Williams said. The restaurant has also raised menu prices to offset additional higher costs due to ongoing inflation and tariffs.

Williams said in a rare case where tips don’t bring servers to the standard minimum wage threshold, many restaurant payroll systems automatically pay the base rate.

The ordinance doesn’t just hurt smaller restaurants like Bronzeville Winery, Williams said. It “will destroy restaurants in the city, especially the ones who hire Black employees. The Black restaurant owner is the one who bets on our neighborhoods, not outside special interest groups who come into our city, lobby and leave."

Instead of hiring servers, restaurants could shift to counter service or using technology such as apps and tablets.

They are also cutting opening hours and closing earlier, said Gina Barge-Farmer, owner of Wax Vinyl Bar and Ramen Shop near Noble Square. As a result, servers work shorter shifts and don’t earn as much. Wax Vinyl opened nearly two years ago and has also cut staff due to rising costs.

Wax Vinyl’s servers typically make more than $30 an hour. “My goal is to make my staff as much money as humanly possible,” Barge-Farmer said.

The controversy about the tipped minimum wage is “a misunderstanding of math,” she said. “We're on the hook for paying the minimum wage, irrespective.”

Under federal law, restaurant owners must pay tipped workers the local hourly minimum wage if their tips plus base salary don’t reach that minimum threshold. In other words, if servers earn less than the standard hourly minimum wage, restaurateurs must pay them the difference.

The federal Fair Labor Standards Act created this “tip credit” system and employers who violate the law are supposed to be penalized. But not all restaurants comply, which might be more often the case with smaller, less-established eateries.

Illinois Restaurant Association President Sam Toia has urged crackdowns on employers who don’t pay the guaranteed minimum wage rather than requiring Chicago restaurants to hike the tipped minimum wage.

Barge-Farmer believes Chicago’s restaurant scene is the best in the country. But she cautions anyone against opening a restaurant here.

“Don’t do it. It’s harder and harder to build anything sustainable,” she said. “One would think the city of Chicago would be more supportive. Instead, it’s death by a thousand cuts.”

Wax Vinyl operates on thin margins. “If it continues this way, I can’t say I want to continue. I’d be happy to close if it gets worse,” Barge-Farmer said.

The mayor “has very good intentions,” Oliver said. But “these policies make it difficult for other restaurants to go into the headwinds in under-resourced communities,” such as Bronzeville and South Shore, where she lives.

Williams said, “I understand the mayor is trying to raise wages for workers. But you have to get under the hood to understand how restaurants work.”

He pointed out that activists who originally spearheaded the campaign don’t live in the community. “We should be the ones who are listened to,” he said.