Chicago City Council Votes to Freeze Tipped Wage Phase-Out, Mayor Vows Veto

The Chicago City Council voted 30-18 on March 18 to freeze the planned elimination of the city's tipped minimum wage, locking servers, bartenders, and other tipped workers at $12.62 an hour and setting up what would be Mayor Brandon Johnson's third veto of his first term.

The vote halts a five-year phaseout that the council itself approved in 2023, which was designed to gradually bring tipped workers up to the full minimum wage of $16.60 by 2028. At $12.62, tipped workers are earning roughly 76% of what most Chicago workers are guaranteed by law. Johnson called the council's move "not only tone deaf, but irresponsible," framing the phaseout as one of the signature achievements of his progressive agenda and pledging to send the freeze ordinance back.

The council's reversal drew immediate criticism from workers who said they were already feeling the squeeze. One server, speaking to FOX 32, described the economic reality on the floor: "I'm working fewer shifts. I'm taking home much less money, which is putting a real strain on my family." The worker also cited fewer diners and said restaurants had responded to higher base costs by cutting hours.

The Illinois Restaurant Association pushed hard for the freeze. President and CEO Sam Toia argued in a statement that "the continued phase-out of the tip credit will eliminate many of their jobs and cause irreparable damage to Chicago's world-renowned, independent neighborhood restaurants." The association claims 496 restaurants closed in Chicago in the first half of 2025 alone, and that 43% of operators surveyed said they faced potential permanent closure as a result of the tipped wage increases. Those figures have not been independently verified, and the IRA has not released its survey methodology.

The 2023 legislation passed in part because the IRA agreed to drop its resistance in exchange for a slow, five-year phaseout rather than an immediate jump to full minimum wage. Many of the alderpeople who voted in favor of ending the tip credit in 2023 voted to freeze it Wednesday, a reversal that drew a visible confrontation outside the chamber. Ald. Anthony Quezada of the 35th Ward was photographed by Block Club Chicago's Colin Boyle confronting restauranteur Donnie Madia after the vote.

The political math is unfavorable for the council's position. Overriding a mayoral veto requires 34 votes; the freeze passed with 30. Unless four additional alderpeople can be flipped, Johnson's veto would hold and the phaseout would resume. Chicago would not be alone in backing away from tip credit elimination: Washington, D.C. voters approved a similar phase-out under Initiative 82, only to see the city council later amend it to stop tipped wage increases once they reach 75% of the full minimum wage.

Johnson's office has framed the freeze as a rollback that hits working-class Chicagoans at the worst possible time, as costs across the city continue to rise. The council, meanwhile, has now rejected two of the mayor's priorities in quick succession, having also voted down his proposed corporate head tax.