In a recent development, the Chicago City Council has given the green light to a substantial wage increase for tipped workers across various establishments, marking a significant change in the current wage structure. However, this wage boost will be introduced incrementally over the next five years.
Presently, most workers in Chicago are entitled to a minimum wage of $15.80 per hour. In contrast, tipped employees, such as restaurant servers, have been subject to a subminimum wage system. This subminimum wage varies, ranging from $9 per hour for workers at smaller businesses to $9.48 for those in larger establishments. The expectation was that tips would supplement their earnings, and employers were legally obliged to bridge the gap for tipped workers whose combined hourly wages and tips fell short of the full minimum wage.
The “One Fair Wage” ordinance, introduced during the summer and endorsed by Mayor Brandon Johnson, seeks to completely eliminate this system. Under this new legislation, wages for tipped workers will witness an initial 8 percent increase starting on July 1, 2024. Subsequently, these wages will rise by 8 percent each year until they align with the city’s standard minimum wage by 2028, with tips received by workers being paid on top of this base wage.
In a special City Council session on Friday, the “One Fair Wage” ordinance garnered strong support, with Alderpeople voting 36-10 in favor of the measure.
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