As of Monday, Chicago restaurants must adjust to a new tipped minimum wage increase, a change that has stirred significant debate across the food service sector, according to the Chicago Sun-Times. Tipped workers in the city will now make $11.02 per hour, while non-tipped workers will see their hourly minimum wage rise to $16.20 for businesses with four or more employees.
The increase comes as part of a broader plan to phase out the subminimum wage in Chicago by 2028, with advocates citing the need for stable and predictable earnings for service industry staff, a push strongly backed by the group One Fair Wage, the Chicago Tribune reports; while opponents from the restaurant industry warn of potential negative consequences including higher food prices and reduced staffing levels as businesses grapple with increased labor costs coming off the heels of the pandemic and continued inflation concerns and with restaurants needing to adapt many are already raising concerns over the financial viability of their operations.
According to the Sun-Times, the Illinois Restaurant Association has commissioned a survey which found that on average, tipped workers earn $28.48 an hour, citing concerns that increased wages may disincentivize tipping, affecting servers' overall earnings. On the other hand, Mayor Brandon Johnson's office highlighted that in areas where the subminimum wage had been removed, growth in both restaurant jobs and establishments strengthened in comparison to those with tipping wage systems in place.
Critics of the new ordinance worry about the capability of restaurants to sustain these financial pressures, the Sun-Times also revealed that Niles Mayor George Alpogianis, who owns multiple restaurant establishments, expressed concerns that this could force restaurants to change their service model or potentially lead to layoffs, while an anonymous Little Village restaurant owner told the publication they feared the new law may change the industry landscape for good, with potential shifts to counter service and raised prices which might deter customer patronage, which could impact the community’s standbys.
Despite the broader state legislation stalling earlier this year, Chicago's efforts to eliminate subminimum wage continue, as employees will also begin accruing paid sick leave at a higher rate starting July 1. Furthermore, Cook County will raise its minimum wage to $14.05, though not all municipalities align with this standard. For employers and employees seeking guidance on the new policies, contact can be made with the Office of Labor Standards at 312-744-2211 or [email protected], the Tribune notes.
