Preserving Fair Wages, One Tip at a Time

Now is not the time to add extra burdens to our neighborhood family run restaurants, and that is what eliminating the tip credit will do. Please click the link below to email your alderperson and ask them to VOTE NO and reject this unfair ordinance.

The Issue

The Chicago City Council is considering an ordinance that would end the tipped minimum wage, fundamentally changing the business model of every restaurant in the city. 

The removal of the tipped minimum wage will hurt tipped workers, restaurant owners, and customers.

The Current System

Under the current tipped wage system:

• The median full-service restaurant tipped worker makes $28.48 per hour in Illinois
  
• Under the current law, the tipped wage in Chicago is $9.48 an hour. No tipped worker in Chicago makes less than the prevailing $15.80 minimum wage for any hour they work. If the combination of $9.48 an hour plus tips does not meet or exceed $15.80 an hour the employer must make up the difference. The notion that tipped employees make less than minimum wage is NOT true. 

Eliminating the Tipped Minimum Wage

Research from cities that have eliminated the tipped minimum wage, like San Francisco and Seattle, found:

• Eliminating the tipped minimum wage will lead to job cuts in the restaurant business
• Restaurant workers in cities with higher tipped minimum wages often have statistically lower average tip percentages and ultimately do not make more in total hourly wages
• For every $1 the minimum wage went up in San Francisco, the likelihood of a median-rated restaurant closing increased by 14%
• In San Francisco, after it was mandated that the minimum wage be $15 for both tipped and un-tipped workers, restaurant closures reached an all-time high
• Eliminating the tipped minimum wage will lead to widespread use of service charges in restaurants

Survey Data

A recent survey of 315 Chicago restaurant operators found that if the tip credit is eliminated and the tipped minimum wage is increased:

• 92% say menu prices will increase
• Three-fourths think tipped employees will decrease their overall pay, with 40% predicting a significant decrease
• 77% believe it will have a “very negative” impact on their operations
• 76% say they will have to decrease the number of tipped workers they employ, with 46% saying they will have to make “significant decreases”
• 66% say they will have to reduce staff or consolidate positions and 58% say they will have to reduce employee hours
• A majority say their new average profit margin will be 1.6%

Latest News:

Chicago Sun Times: Restaurant association offers alternative to ending subminimum wage for tipped workers (9.6.23)

Crain's: Commentary: Restaurants must have a seat at Johnson's policy table (8.28.23)

Chicago Tribune: Editorial: When it comes to restaurants and tipping, Brandon Johnson’s allies should be careful what they wish for (8.23.23)

Chicago Tribune: Restaurant owners: Eliminating tipped wages in Chicago would have consequences (8.9.23)

Chicago Sun Times: For sake of small restaurants, go slow on getting rid of subminimum wage (7.22.23)