Chicago begins push to eliminate subminimum wage for tipped workers

In the fall of 2023, Chicago became the largest U.S. city to phase out subminimum wages when the City Council approved the One Fair Wage Ordinance.

More than 40,000 Chicago workers will soon be getting a raise.

As of July 1, the minimum wage in the city increased from $15.80 to $16.20 an hour. Tipped workers will also get a boost, to a little more than $11 an hour. But over the next five years, those workers will see parity - tips or not.

Elizabeth Royal started as a tipped worker in 1997, when the minimum wage was $5 an hour.

“If you don’t have any tables, what happens? How do you pay your bills?” she asked.

Now she and her brother Rafael are among the co-owners of Bianca’s Burgers, 2525 W Division St., in Humboldt Park. They opened the neighborhood restaurant during the pandemic and see service as key to its success.

“Hospitality is what we do, and we should extend that not just to our guests but to our employees,” Rafael Royal said. “Because without them, we would be nothing.”

In the fall of 2023, Chicago became the largest U.S. city to phase out subminimum wages when the City Council approved the One Fair Wage Ordinance.

“We are for the first time starting to phase out the sub-minimum wage in Chicago, where people reach a place where everyone is making a minimum and livable wage,” said Ald. Jessie Fuentes, who represents the city's 26th Ward and served as one of the measure's sponsors.

But not everyone is as sanguine about the idea. The Illinois Restaurant Association called Chicago’s One Fair Wage Ordinance a solution in search of a problem.

The IRA said current law already requires that every tipped employee in Illinois make at least minimum wage with the employer making up the difference, if necessary.

“The move to reduce and eventually eliminate the tip credit beginning on July 1 will increase the costs on consumers and on small and neighborhood businesses,” President Sam Toia said in a statement. “It will lower the take-home pay for hardworking employees. And it will put thousands of workers at risk of losing their jobs.”

But at Bianca’s Burgers, the owners see the One Fair Wage measure as a competitive advantage.

“Once you pay them this wage, you get much more retention, but you also get better service in the kitchen, in the front of the house,” Rafael Royal said. “Because paying them is proof that we value their time and their energy and their expertise.”