Ald. Nugent pushes to freeze the phase-out of Chicago's subminimum wage for tipped workers

Mayor Brandon Johnson counts phasing out the subminimum wage for tipped workers as one of the signature wins on his progressive agenda. But it looks like the mayor will have to fight to keep it there.

At next week’s City Council meeting, Far Northwest Side Ald. Samantha Nugent (39th) plans to use a parliamentary maneuver to resurrect a stalled proposal that would freeze the subminimum wage at 24% of the $16.60 minimum wage paid to hourly Chicago workers who do not receive tips.

Without the freeze, tipped workers now paid $12.62 an hour would receive a raise to 16% of Chicago’s minimum wage. That amount is re-set every July 1.

With the freeze, they would still receive a raise, but it would be capped at 24% of whatever the minimum hourly wage turns out to be.

Nugent argued that restaurant owners, particularly in wards like her own that border surrounding suburbs, are suffering — and that scores of them have either closed or reduced staff.

She blamed the economic crunch on a combination of rising property taxes, food and labor costs, on-again, off-again tariffs, increased license fees, paid leave and other city mandates.

“We’ve seen a tremendous number of restaurants closed since this was enacted. We’re also seeing that restaurateurs are having to have less back-of-the-house staff because they’re having to pay their servers so much more money,” Nugent told the Sun-Times Wednesday.

“The federal minimum wage is $7.25… I just want to contextualize where we are on this. We’re trying to provide some stability to restaurateurs. I’ve seen a lot of restaurants close up here in [the 39th Ward]. If you talk to [Far Southwest Side Ald.] Matt O’Shea and others, it’s a pretty diverse group of aldermen who say this legislation has been incredibly detrimental in their communities.”

Both Nugent and Ald. Bennett Lawson (44th), who tried to impose the freeze last year, said they are confident they have 26 votes they needs to yank an ordinance stalled in committee without action for more than 60 days and pass it on the Council floor.

If Johnson chooses to veto the ordinance, a two-thirds vote, or 34 votes, would be needed to override the mayor’s veto.

“That turns up pressure on some of the alders who should hear from some of their local restaurateurs,” Lawson said Wednesday. “ This is an issue that’s timely. We have to deal with it before there’s another increase. Most people are talking to their local folks. They will tell you that, as costs continue to rise, they can mitigate some of the other stuff, but labor is continuing to be one of the costs that’s soaring.”

lllinois Restaurant Association President Sam Toia is working to secure a veto-proof majority. In the first half of 2025, nearly 500 Chicago restaurants closed their doors, Toia said. Since the phase-out began July 1, 2024, 84% of Chicago restaurants have increased their menu prices.

Nearly 70% of the 300 restaurants that responded to a recent association poll said they had either cut employee hours or reduced the overall number of employees to accommodate the city-mandated phase-out, Toia said.

“They’re cutting back-of-the-house. They’re cutting people who work on the line or cutting your host at the front door. If they had six wait people on, they’re going to four wait people,” Toia said. “This was definitely intended to help. But it’s causing a lot of problems. When shifts are cut, pay stays the same or it’s even less. A lot of restaurant have cut their hours. They used to be open til midnight. Now they’re open until 10 [p.m.]. They used to be open for lunch. Now they’re not.”

As the former owner of Leona’s Restaurants, Toia knows from experience how razor-thin profit margins are — and that the only things you can cut are menu prices or labor costs.

“If we do this next phase, we’re going to see more and more empty storefronts on 79th Street, 53rd Street, Lincoln Avenue, Lawrence Avenue or Western Avenue," he said. "When you have more empty storefronts, crime goes up. It’s just a domino effect."

Johnson has firmly declared that Chicago was “not going back to the days where the government believed that some workers deserve less.”
Ald. Jessie Fuentes (26th) agreed that this is "not a moment to tell workers that they’re not worth getting the minimum wage."

“It’s extremely hard to rent in the city of Chicago, to buy groceries in the city of Chicago, to support child care in the city of Chicago. And we are telling these folks they can’t even make a little over $15-an-hour, which is a minimum wage that everybody will tell you is not enough," she said.