The Illinois Restaurant Association introduced an ordinance to make Chicago’s tipped wage the highest in the country. The new ordinance will ensure that servers earn at least $20.54 per hour in wages and tips at restaurants that make over $3 million in annual revenue. Additionally, the legislation will crack down on businesses who do not pay workers the legally required $15.80 tipped minimum wage by tripling the fines they receive for breaking the law. The measure is a pragmatic solution to benefit Chicago’s restaurants, tipped workers, and customers.
“We must offer solutions that work for all. We must listen to our consumers, to our servers and to our industry. Eliminating the tip credit will result in job losses and drastically increase prices for consumers. It will increase costs for restaurants and it will lower wages for tipped employees,” said Sam Toia, President & CEO of the Illinois Restaurant Association.
Currently, to ensure all tipped workers make the city required minimum wage, business owners who use a tip credit pay $9.48 per hour of a tipped workers wage, with tips covering, and exceeding, the remaining amount needed to reach $15.80. Under the proposed ordinance, restaurants will still pay their servers a $9.48 per hour wage, with tips covering the remaining amount needed to reach $15.80. However, restaurants that make over $3 million in annual revenue will be required to ensure their tipped workers take home a minimum of $20.54 per hour in combined earnings.
Toia continued, “The city should focus on protecting our consumers and our restaurants who are dealing with the consequences of double-digit inflation while still trying to recover from the pandemic. Currently, the city also needs to make sure that bad actors who aren’t paying their employees at least $15.80 an hour are being penalized for breaking the law. Alderman Lawson’s ordinance does that while not driving labor costs sky high for smaller, family-owned restaurants that are the lifeblood of our neighborhoods.”
“As someone who has served on the staff side and now the elected side, I have spent a significant amount of time listening to constituents and businesses – learning what is most important to them,” Lawson said. “What I have learned on the issue of tipped wages is that if we eliminate them, it will hurt our neighborhoods and force some of our favorite family-owned establishments to close, which will hurt our workers and result in lost jobs.”