The 'Raise Chicago' Ordinance currently proposed in City Hall would bump the city's minimum wage - which is a good thing - people should be paid fair wages for their hard work. What's not so good is that unlike state law, the Raise Chicago Ordinance would eliminate the tip credit for servers and bartenders, drastically decreasing the earnings Chicago Workers rely on.
Most tipped workers earn well above the minimum wage through a combination of their base wage and tips, oftentimes between $19 and $25 an hour.
Tipping leads to stronger and more rewarding work environments for employees.
Surveys have shown 81% of customers and 97% of employees prefer the current tip-system to a tip-free alternative.
Restaurants who eliminate tipping often replace it with a 'Service Charge' on customer's bills, which would be shared with the restaurant staff as the employer wishes.
Rising labor costs will cause restaurants to increase menu prices, cut staff hours, and let staff go in order to afford to operate.
A large percentage of Chicago restaurants and bars are independently owned. These businesses will be hit the hardest if the tip credit is eliminated, many will struggle to stay in business.
Tipping provides an incentive for exceptional customer service that creates unlimited earning potential for servers.
Data consistently shows restaurant servers earning far more than the minimum wage. When they don't, employers are already legally required to make up the difference. No Chicago restaurant worker ever makes "sub-minimum wage."
In 2015, New York increased the base wage for tipped employees by more than 50 percent. The following year, Census Bureau Data showed New York as having lost over 200 restaurants.
No city or state has eliminated the tip credit in the last decade. In fact, over the past two years, five states attempting to eliminate the tip credit failed because it works for restaurant workers. Illinois lawmakers have set a path to increase the minimum wage and they did so without hurting restaurant workers.
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