Amendment of Municipal Code Chapter 6-105 modifying timelines for employer allowance minimums in hourly wage occupations receiving gratuities

Votes › Workforce Development › 27th Ward: Walter R. Burnett

• Record number: SO2026-0024043
• Type: Ordinance; category: Municipal Code Amendments
• Status: Final
• Sponsor: Walter R. Burnett (27th Ward)
• Committee: Committee on Workforce Development
• Introduction Date: Mar 18, 2026
• Final Action Date: May 20, 2026
• Official record: Office of the City Clerk

Roll call: Passed May 20, 2026

49 yea, 1 nay. This was a divided vote. On motion of Alderperson Rodriguez, and unsuccessful motion to reconsider by Alderperson Mitchell, the matter was Passed. Voted at the City Council meeting of May 20, 2026.

Nay (1): Jason C. Ervin (28)

Yea (49): Daniel La Spata (1), Brian Hopkins (2), Pat Dowell (3), Lamont J. Robinson (4), Desmon C. Yancy (5), William E. Hall (6), Gregory I. Mitchell (7), Michelle A. Harris (8), Anthony Beale (9), Peter Chico (10), Nicole T. Lee (11), Julia M. Ramirez (12), Marty Quinn (13), Jeylú B. Gutiérrez (14), Raymond A. Lopez (15), Stephanie D. Coleman (16), David H. Moore (17), Derrick G. Curtis (18), Matthew J. O'Shea (19), Jeanette B. Taylor (20), Ronnie L. Mosley (21), Michael D. Rodriguez (22), Silvana Tabares (23), Monique L. Scott (24), Byron Sigcho-López (25), Jessica L. Fuentes (26), Walter R. Burnett (27), Chris Taliaferro (29), Ruth Cruz (30), Felix Cardona Jr. (31), Scott Waguespack (32), Rossana Rodríguez Sánchez (33), William Conway (34), Anthony J. Quezada (35), Gilbert Villegas (36), Emma Mitts (37), Nicholas Sposato (38), Samantha Nugent (39), Andre Vasquez Jr. (40), Anthony V. Napolitano (41), Brendan Reilly (42), Timothy R. Knudsen (43), Bennett R. Lawson (44), James M. Gardiner (45), Angela Clay (46), Matthew J. Martin (47), Leni Manaa-Hoppenworth (48), Maria E. Hadden (49), Debra L. Silverstein (50)

Plain-language summary

Written by AI (@cf/openai/gpt-oss-120b) from the ordinance text only: SO2026-0024043 Substitute Ordinance.pdf. AI can make mistakes; the official document always wins.

The city changed the rules for how much extra pay employers can add to the hourly wage for workers who normally get tips. The allowed percentage of the minimum wage will drop over time, eventually ending for larger employers. Smaller employers will keep a smaller tip allowance for a longer period before it also ends.

• The tip allowance starts at up to 40% of the minimum wage and decreases each year through 2033.
• Large employers (21+ workers) lose the tip allowance entirely by July 1, 2028.
• Smaller employers (4-20 workers) keep a reduced tip allowance that phases out by July 1, 2033.
• Specific percentages are set for each time period, ranging from 40% down to 0%.
• The ordinance takes effect immediately after it is passed and published.

Who: Employers and their covered employees in hourly jobs where tips are customary are affected.

Where: Chicago

Impact report

Written by AI from the official document. AI can make mistakes; the official document always wins.

This ordinance would slow down the phase-out of the tip credit, letting employers of tipped workers pay below the full minimum wage for longer, with a longer timeline for businesses with 4 to 20 employees.

Who it affects

• Tipped workers at employers with 21 or more employees: They would get the full minimum wage from their employer starting July 1, 2030, instead of July 1, 2028.
• Tipped workers at employers with 4 to 20 employees: Their employers could keep counting tips toward part of their wage until July 1, 2033, when the full minimum wage would be required.
• Employers with 21 or more employees in tipped jobs: They could keep counting tips as 24 percent of the minimum wage until June 30, 2028, then step down to 16 percent and 8 percent before the credit ends on July 1, 2030.
• Employers with more than 3 but fewer than 21 employees in tipped jobs: They could keep a 24 percent tip credit until June 30, 2030, then step down to 16, 12, and 6 percent before the credit ends on July 1, 2033.

What changes

• The 24 percent tip credit would last until June 30, 2028, instead of ending June 30, 2026.
• Larger employers (21 or more employees) would have to pay the full minimum wage starting July 1, 2030, instead of July 1, 2028.
• Smaller employers (more than 3 but fewer than 21 employees) would get a separate, slower schedule to reduce the tip credit.
• Smaller employers would have to pay the full minimum wage starting July 1, 2033.
• The tip credit would go down step by step each July 1 until it ends.

Money

• Employers may count tips as up to 24 percent of the minimum wage through June 30, 2028 (all covered employers) and through June 30, 2030 (employers with 4 to 20 employees).
• Employers with 21 or more employees: tip credit of up to 16 percent from July 1, 2028 to June 30, 2029, and up to 8 percent from July 1, 2029 to June 30, 2030.
• Employers with 4 to 20 employees: tip credit of up to 16 percent (July 1, 2030 to June 30, 2031), 12 percent (July 1, 2031 to June 30, 2032), and 6 percent (July 1, 2032 to June 30, 2033).
• Starting July 1, 2030 (21 or more employees) and July 1, 2033 (more than 3 employees), employers must pay tipped workers at least the full minimum wage.

When: Upon passage and publication

Timeline

• Mar 18, 2026: Referred, City Council. The matter was Referred to Committee.
• May 12, 2026: Substituted, Committee on Workforce Development. Substituted in Committee.
• May 12, 2026: Recommended to Pass, Committee on Workforce Development. The matter was recommended to Pass by controlling legislative body.
• May 20, 2026: Passed, City Council (49 yea, 1 nay), at the City Council meeting. On motion of Alderperson Rodriguez, and unsuccessful motion to reconsider by Alderperson Mitchell, the matter was Passed.

Documents

• w27 - o24043.pdf (Legislation)
• SO2026-0024043 Substitute Ordinance.pdf (Legislation)
• SO2026-0024043 CL.pdf (Committee Letter)

Lobbying and money

Computed links; money near a vote is not evidence that it influenced the vote.

Who lobbied on it

• Chicagoland Chamber Of Commerce: SO2026-0024043 (SUPPORT); SO2023-0004210 (OPPOSE); (1 filing, Apr 1, 2026 to Jun 30, 2026; Carl Gutierrez; matched by record number)

Money from these interests in the 365 days before the vote

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• Amendment of Municipal Code Titles 3, 4 and 8 regarding technical and scriveners' corrections (2027 Municipal Code Corrections Ordinance) (O2026-0029649, introduced Oct 21, 2026, Referred)
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