My article about a new law that goes into effect in Chicago to raise the tipped minimum wage for restaurant servers and others. What seems like a straightforward issue is quite complex, and the longer-term impact of the ordinance is unclear.
"Restaurants in Chicago must start paying tipped workers more per a new city ordinance that has sharply divided the restaurant industry and supporters of the law...
Advocates have been demanding better wages for workers. But restaurant associations say that federal law already ensures a base minimum wage and laws like Chicago’s ordinance will reduce earnings for tipped workers.
As restaurants in Chicago and across the U.S. continue to face headwinds after the COVID-19 pandemic, the impact of the city’s ordinance will be closely watched.
...This year, legislation to raise the tipped minimum wage was proposed in 17 states, including Illinois, but none passed, according to the National Restaurant Association....
The advocacy group One Fair Wage spearheaded the campaign in Chicago and called the “subminimum wage” a “direct legacy of slavery.”
The group led a similar law in Washington, D.C., that went into effect May 2023. The impact there is a hint to the potential effect of Chicago’s ordinance.
“We hope [Chicago] won’t follow what happened in D.C.,” said Sean Kennedy, the National Restaurant Association’s executive vice president for public affairs...
The Illinois Restaurant Association, and some Chicago restaurant owners as well as servers, say the new regulation hurts them and that eateries are not fully recovered from the COVID-19 pandemic.
They contend restaurants will have to raise menu prices as their labor costs increase, especially amid ongoing struggles with inflation. Subsequently, customers will tip less if food prices go up and if servers’ base pay is raised, they said. Restaurant owners could also downsize waitstaff or shift to counter service.
“Restaurants will not be able to sustain another hit like this,” said Niles Mayor George Alpogianis, who owns eight restaurants.
Servers at some of his restaurants make $45 to $50 per hour with tips on busy shifts...Nationally, tipped servers make a median of $27 per hour, according to the National Restaurant Association.
Under federal law, restaurant owners must pay tipped workers the local hourly minimum wage if their tips plus base salary don’t reach that minimum threshold. In other words, if servers earn less than the overall hourly minimum wage, restaurateurs must pay them the difference...
Rather than requiring Chicago restaurants to hike the tipped minimum wage, Sam Toia, president of the Illinois Restaurant Association, urged hefty fines and crackdowns on employers who don’t pay the legally guaranteed minimum wage.
Chicago should “add more inspectors and go after bad actors,” he said."
READ THE STORY HERE:
https://lnkd.in/eUWM4aa2
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