The implementation of Chicago’s new ordinance phasing out the subminimum wage for tipped workers has sparked significant controversy within the restaurant industry.
Restaurant owner Dave Bonomi announced he has had to eliminate nearly twenty positions across his three establishments, a direct result of the One Fair Wage ordinance, which took effect on July 1, 2024.
Bonomi, who operates Peanut Park Trattoria on Taylor Street and Coalfire with two locations, stated, “We eliminated almost 20 positions between our three restaurants. We had 64 and now are down to 45, mostly because of it.”
In the wake of this law, which aims to gradually increase the minimum wage for tipped workers from $9 per hour to $16.20 over five years, Bonomi and other restaurant owners are joining the Illinois Restaurant Association in advocating for a repeal.
Their push comes after seeing similar efforts in Washington, D.C., where Mayor Muriel Bowser proposed a budget agenda to repeal a comparable law that also went into effect this year.
Sam Toia, CEO of the Illinois Restaurant Association, referenced the D.C. situation, saying, “A lot of conversations are going on with our members and Chicago City Council members because we just saw what happened in D.C.”
During a recent City Council meeting, Alderman Bennett Lawson introduced a proposed ordinance to halt the phase-out.
“I actually had both ready to go: A repeal and a pause, knowing full well that they would both be sent to Rules,” Lawson explained.
He acknowledged the complexity of the situation, noting that it is challenging for politicians to admit that a decision may have had negative consequences.
“It’s very hard for any politician to admit they did something that didn’t work. Practically speaking, this could be vetoed.”
He expressed hope that colleagues will recognize the damage the ordinance has caused in their neighborhoods, prompting them to consider overriding a potential mayoral veto.
Alderman Mike Rodriguez, who chairs the Workforce Development Committee, is a strong proponent of maintaining the One Fair Wage ordinance, arguing that higher wages benefit the economy.
“Paying people more is good for our economy. We see that in any kind of minimum wage increase,” Rodriguez told the Sun-Times.
Mayor Brandon Johnson has positioned the phase-out of the subminimum wage for tipped workers as a significant achievement in his progressive agenda.
His administration maintains that over 60,000 workers in Chicago will benefit from wage increases over the next four years, with a focus on uplifting Black and Brown women in the workforce.
Despite this assertion, operators in the restaurant industry are expressing increased challenges.
Donnie Madia, a partner at One Off Hospitality, which employs nearly 800 people, stated, “These two drastic changes sent shockwaves through our industry.”
He indicated that the first wage increase last year, raising tipped wages from $9.48 to $11.02, alongside annual increases until 2028, has put a strain on restaurants.
According to Toia, the ordinance has resulted in job losses, with an estimated 5,200 jobs cut from Chicago restaurants as the law was implemented.
On the other side of the issue, Nataki Rhodes, a former server and bartender now working with the national advocacy group One Fair Wage, argues that many tipped workers historically did not earn enough in tips to meet minimum wage standards without employer intervention.
Rhodes emphasized that business owners often use rising operational costs as a rationale to avoid increasing wages, denying workers essential support in the face of inflation.
“When is the time right to raise wages?” she questioned.
While Illinois law mandates that employers must pay tipped workers the difference if their wages and tips do not meet minimum wage, many occurrences of non-compliance persist, prompting advocates to push for stronger regulations.
Toia called for the state to focus on penalizing violators instead of instituting higher wage costs across the board, advocating for legislation that would revoke licenses for businesses failing to meet wage standards.
The Illinois Department of Labor outlines that employers who violate these wage laws are liable for unpaid wages and cumulative damages.
Efforts to eliminate the subminimum wage statewide have not succeeded, as seen in the failed HB2982 proposal, but advocates continue to rally for fair pay, emphasizing its significance as a racial justice issue impacting thousands of workers across Illinois.
With Illinois leading the Midwest with a $15 minimum wage, compared to Missouri’s $13.75, the debate over tipped wages remains a contentious focal point for both sides.
Lorelei Walters, who has worked as a bartender since 2011, expresses empathy for both workers and restaurant owners, understanding the complexities faced by small businesses.
She remarked on the seasonal fluctuations of income in the service industry, stating, “In the winter, we struggle. It’s the type of employment where you have to save in the summer in order to be able to survive in the winter.”
Bonomi voiced concerns over how the ordinance was introduced, suggesting that its timing and name, One Fair Wage Act, were strategically designed to garner support without fully informing the lawmakers of the economic impacts.
“There were some City Council members who voted for it. I don’t think they clearly understood it,” Bonomi added.
Madia reiterated the potential misunderstandings surrounding tipped workers’ wages, noting, “I believe that there might have been a misunderstanding about tipped wage versus minimum wage.”
Alderman Ray Lopez, who initially supported the ordinance, has since changed his perspective and is now backing efforts toward repeal.
Lopez recalled negotiations that led to the five-year phase-in for the ordinance, expressing frustration that the compromise has become harmful to businesses in his district.
He indicated that securing the necessary votes for repeal may prove to be a challenging task, despite discussions within the City Council.
“I’ve had one or two individuals mention [a repeal] to me anecdotally but nothing in terms of a serious effort, which is problematic if it’s going to be successful,” Lopez remarked, hinting at the uphill battle faced by those opposing the ordinance.
As the conversations surrounding the One Fair Wage ordinance continue in the city council chambers, both proponents and critics remain engaged, revealing the intricate dynamics at play in Chicago’s restaurant industry amid rising wage debates.
image source from：https://chicago.suntimes.com/small-business/2025/05/23/chicago-restaurateurs-one-fair-wage-ordinance-tipped-workers
