Chicago officials are considering raising the minimum wage for tipped employees as part of a proposal that could alter the restaurant industry.
Last month, Chicago Mayor Brandon Johnson proposed an ordinance that would put the city's minimum wage for tipped employees on the same level as non-tipped employees. The bill has been cosponsored by 25 members of Chicago City Council.
The current minimum wage in Chicago is $15.80 per hour for those who work at companies with 21 or more employees and $15 an hour for those working for businesses with 4-20 workers. The city's minimum wage is adjusted for inflation.
Currently, tipped employees are entitled to $9.48 per hour with larger companies and $9 per hour at smaller businesses.
The bill proposes phasing in the new minimum wage over two years.
The minimum wage for both tipped and non-tipped workers far exceeds federal minimums. The minimum wage in the U.S. is $7.25 per hour for non-tipped employees. Tipped employees have a minimum wage of $2.13 per hour.
In both Chicago and the U.S., companies are obligated to pay their employees enough to make the minimum wage for non-tipped employees if they don't earn enough from tips.
Johnson openly expressed his support for increasing the minimum wage for tipped workers last month when he donned an apron on behalf of One Fair Wage.
"The sub-minimum wage is only 60% of the minimum wage and workers are forced to deal with rampant harassment on the job to get tips," One Fair Wage said about the proposal in Chicago. "It's unlivable and unsustainable and the reason for the staffing crisis."
The National Restaurant Association has opposed measures to raise the minimum wage for tipped workers.
"There’s a reason people choose tipped restaurant jobs — they know the economics are in their favor," the National Restaurant Association said. "For many servers, they've chosen restaurants as a career because their industry skills and knowledge mean high earning potential in a job that's flexible to their needs. For others, they’re looking for something — extra income, customer interaction, business skills — that make the opportunity ideal."
According to the Bureau of Labor Statistics, the median server earned an hourly wage of $12.50 per hour in 2021. The BLS said its data includes tips.
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