City Council votes to end sub-minimum tipped wages for service workers

CHICAGO - In a special Friday session, the Chicago City Council passed a measure ending sub-minimum wage for tipped workers over a five-year period.

Aldermen voted 36-10 in favor of the measure which guarantees that all workers in Chicago earn the same minimum wage, regardless of their tipped status.

The plan would phase out the tipped wage system over the next five years starting July 2024, reaching the full minimum wage by 2028. Those workers will receive an increase of wages by 8% until it matches Chicago's standard minimum hourly wage of $15.80.

Tipped workers currently make $9.48 per hour, or 60 percent of their non-tipped counterparts. Chicago currently has roughly 100,000 tipped workers.

The vote marks a victory for One Fair Wage advocates who, on Tuesday, announced a half-million-dollar aid package aimed at helping Chicago restaurants navigate the transition.

Full-service restaurants that have been operating for at least one year are eligible for grants of $10,000, which are designed to provide support for employers as they begin the process of transitioning to the new wage structure.

In addition to financial assistance, One Fair Wage is offering free training to all restaurants, regardless of whether they receive grants. The goal is to ensure a smooth and successful transition for both employers and employees as the sub-minimum wage system is phased out.

Friday's vote makes Chicago the largest U.S. city to eliminate the tipped wage for service workers, according the Chicago Tribune.

The Illinois Restaurant Association released the following statement Fiday after the vote: 

"While we wholeheartedly disagree with the decision to move forward with the elimination of the tip credit, we do believe the amended 5-year phase-in plan is a compromise we can accept and represents a middle ground between what our members want and the City’s legislative priorities. Change is always difficult, and we have fought such proposals for years; however, negotiations require concessions by both sides to come to a resolution, and this ordinance is the result of an open dialogue between our organization, the Mayor’s office, and members of the Chicago City Council. While imperfect, our Board of Directors believed a deal to extend the implementation period was the best way for our industry to move forward and adjust to the City’s new stance on this issue."

This story is developing. Check back for updates.