EMPLOYMENT LAW NEWS
Chicago Mayor Vetoes Changes to Tipped Wage
By Dana Holle, GovDocs Counsel and Manager Employment Law and Compliance
March 7, 2026
Chicago’s City Council voted to pause the phased elimination of the tipped wage, but Mayor Brandon Johnson vetoed the measure, arguing it would harm tipped workers’ earnings. The Council now needs additional votes to override the veto, otherwise the scheduled phaseout toward equal minimum wage by 2028 will continue.
On March 25, 2026, Mayor Brandon Johnson vetoed an ordinance passed by Chicago City Council that would have frozen the tipped credit at 24% of the applicable minimum wage rate and halted the phase out of the tipped wage in the Windy City. The debate over the tipped wage, however, is far from settled.
Background of Chicago’s Tipped Wage Phase Out
In 2023, Chicago City Council voted 36-10 to pass Ordinance SO2023-0002995, gradually phasing out the tipped wage over five years, after which employers will pay the same rate as the standard minimum wage rate beginning July 1, 2028. The tipped credit elimination breaks down as follows:
- July 1, 2024: 32% of applicable minimum wage rate
- July 1, 2025: 24% of applicable minimum wage rate
- July 1, 2026: 16% of applicable minimum wage rate
- July 1, 2027: 8% of applicable minimum wage rate
Then on July 1, 2028, as indicated above, the tipped credit is eliminated. Employers found in violation of the law can face fines between $500 and $1,000 for each offense. Each day a violation continues constitutes a separate offense with a separate fine.
City Council Halts Tipped Wage Phaseout
As of 2026, there have been two years of implementation of the tipped wage phaseout. In just two months, Chicago’s tipped rate will increase by another 8%.
However, on March 18, 2026, the Chicago City Council voted 30-18 to reverse course on the City’s tipped credit elimination under Ordinance SO2025-0017549, which would keep the tipped credit at 24% of the applicable minimum wage rate.
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Mayor Johnson’s Veto and Next Steps
In his signed veto of the ordinance, Mayor Johnson stated, “This ordinance would deprive tipped workers of desperately needed financial stability across the city of Chicago by maintaining a subminimum wage. This ordinance would harm an estimated 80,000 tipped workers in Chicago.”
The vetoed ordinance is now returned to the City Council where council members need 34 votes, four more votes than they previously had to pass the measure, to override Mayor Johnson’s veto. Otherwise, the tipped wage phaseout remains in place in Chicago. The vote is likely to come in April.
