Chicago City Council Votes 30-18 to Freeze Tipped Wage Phase-Out

The Chicago City Council voted 30-18 on March 18 to freeze the city's tipped subminimum wage at $12.62 per hour, halting a five-year phase-out plan that had been on track to eliminate the tip credit entirely by July 1, 2028. Mayor Brandon Johnson called the move "shameful" and pledged a veto, but the council's tally falls four votes short of the 34 needed to override him.

The freeze locks tipped workers — restaurant servers chief among them — at a rate roughly 24% below Chicago's full $16.60 minimum wage. Under current law, employers must make up the difference when hourly pay plus tips fall short of $16.60, meaning the system assumes tips will cover at least $3.98 per hour on top of the base rate.

The ordinance was authored by Ald. Samantha Nugent (39th Ward), who had herself voted for the original 2023 phase-out. That earlier measure passed 36-10 on October 6, 2023, after the Illinois Restaurant Association agreed to drop its opposition in exchange for the slow timeline, under which tipped workers would have received annual 8% raises each July 1 until reaching parity with the full minimum wage. Wednesday's freeze vote included support from several alderpeople who had backed that 2023 compromise, a reversal that drew sharp reaction on the council floor.

Ald. Anthony Quezada (35th Ward) had called the 2023 vote "a victory for workers throughout Chicago." After Wednesday's count, Block Club Chicago photographer Colin Boyle captured Quezada confronting restaurateur Donnie Madia in the council chambers.

Restaurant industry groups had pressed hard for the freeze. Illinois Restaurant Association president Sam Toia made the case at a City Hall news conference the morning of the vote. "People are losing their jobs," he said. "Shifts are being eliminated." Toia and other industry supporters argued that the scheduled increases have squeezed already thin margins, forcing operators to cut staff, raise menu prices, and shelve expansion plans.

Johnson dismissed those claims. The mayor said city officials have tracked new business licenses and view Chicago's restaurant industry as doing well. He framed the tipped wage phase-out as one of the signature achievements of his progressive agenda and said it would be "not only tone deaf, but irresponsible" to stop it. The freeze vote sets up what would be the third veto of his first term.

If Johnson vetoes and the council cannot assemble 34 votes to override, the phase-out resumes. If he does not veto, Chicago would become only the second major U.S. city to reverse course on eliminating the tip credit. Washington, D.C. went through a similar reversal after voters approved Initiative 82 to phase out its tipped wage; the D.C. council later amended the measure to stop increases once the tipped rate reaches 75% of the full minimum wage.

The political math in Chicago currently favors the mayor holding the line. At 30-18, supporters of the freeze would need to flip four more votes to override a veto — and the ordinance's author had to pull support from alderpeople who had already once committed to ending the tip credit entirely.