Chicago Restaurants Push Back Against Tipped Minimum Wage Phaseout
Restaurant owners in Chicago are speaking out against a new city ordinance that will slowly get rid of the tipped minimum wage. Many owners worry that this change could make it hard for their businesses to survive. Some say they might have to close their restaurants or lay off workers if the law goes forward as planned.
What the New Law Means for Restaurants and Workers
The Chicago City Council passed the new ordinance in October 2023. The law will phase out the tipped minimum wage over five years. By 2028, all restaurants in Chicago will have to pay every worker the full minimum wage, no matter how much they make in tips.
Right now, Chicago restaurants are allowed to pay tipped workers, like servers and bartenders, a lower base wage. The rule is that their tips must bring their total pay up to the city’s minimum wage. With the new law, the base wage for these workers will go up a little each year until it matches the minimum wage for workers who do not get tips.
Concerns from Restaurant Owners
Many restaurant owners say this change will make it much more expensive to run their businesses. They worry that higher labor costs could mean:
- Higher menu prices for customers
- Reduced work hours for employees
- Possible job losses
Sam Toia, president and CEO of the Illinois Restaurant Association, shared his concerns. He said, "This is going to be devastating for small businesses." He also added, "We’re already operating on razor-thin margins."
Voices from Restaurant Workers
Some workers, however, are in favor of the new ordinance. They believe it will help them earn a more steady and fair income. Maria Sanchez, a server at a downtown Chicago restaurant, said, "We deserve to be paid fairly for our work." She also explained, "Tips can be unpredictable, especially during slow seasons."
Industry Leaders Ask for Changes
The Illinois Restaurant Association and a group of local restaurant owners are now asking the City Council to either repeal or change the new law before it is fully in place. They say the hospitality industry is still trying to recover from the COVID-19 pandemic. They believe that the new wage requirements could slow down that recovery even more.
Supporters Say It’s About Fairness
Not everyone agrees with the restaurant owners. Supporters of the ordinance include labor advocates and some city officials. They say the law will help fix wage gaps and make sure workers are not so dependent on tips, which can change from day to day and may be unfair at times.
Alderman Carlos Ramirez-Rosa (35th) is one of the city officials who supports the new law. He said, "This is about fairness and dignity for workers."
What Happens Next?
Chicago’s new law is not the only one of its kind. Similar rules are being looked at or put in place in other cities across the United States. In Chicago, the ordinance will start to phase in by July 2024. The tipped minimum wage will go up each year until it is completely gone by 2028.
Restaurant owners say they are not giving up. They plan to keep talking to city leaders and letting the public know how the law could affect their businesses. As Sam Toia said, "We want to work with the city to find a solution that supports both workers and small businesses."
Key Facts About the Ordinance
- The ordinance was passed by the Chicago City Council in October 2023.
- It will phase out the tipped minimum wage over five years.
- All restaurant workers must be paid the full minimum wage by 2028, no matter how much they make in tips.
- Currently, restaurants can pay tipped workers a lower base wage if their tips bring them up to the city’s minimum wage.
- The base wage for tipped workers will increase each year until it matches the standard minimum wage for non-tipped employees.
- The Illinois Restaurant Association and local restaurant owners are asking the City Council to repeal or change the ordinance before it takes full effect.
- The hospitality industry is still recovering from the COVID-19 pandemic, and some believe the new wage rules could slow that recovery.
- Supporters include labor advocates and some city officials, who say the law will help make wages more fair and reliable.
- The ordinance will start phasing in July 2024, with increases each year until 2028.
- Similar laws are being considered or used in other cities across the country.
The debate over the tipped minimum wage in Chicago is far from over. Both sides are working hard to make their voices heard as the city moves forward with this big change.