Chicago is poised to eliminate the system allowing tips to make up part of hourly wages for servers at its approximately 7,000 restaurants.
By Heather Haddon | Photographs by Anjali Pinto for The Wall Street Journal
The battle over tipping is accelerating in Chicago, where lawmakers could advance a new law as soon as Wednesday requiring restaurants to pay waitstaff the city’s standard minimum wage, regardless of how much they earn in gratuities.
The proposal, which Mayor Brandon Johnson is expected to sign, would require many of Chicago’s approximately 7,000 restaurants to drop a longstanding system allowing tips to make up part of servers’ hourly wages.
Chicago restaurateur T.J. Callahan ran a similar experiment in April when he opened his newest restaurant in a neighboring suburb: In place of tipping, he added a 20% service charge to all checks to boost employees’ hourly pay.
It didn’t go well, he said. Servers’ overall pay declined and sales fell. Some diners blasted the move as “socialist.” He switched back to relying on customers to tip his servers after five months.
“Americans are used to this tipping model. They’ve been doing things this way for a long time,” Callahan said.
T.J. Callahan, at his restaurant Farm Bar, said pay for service employees at the restaurant would eventually grow by around 65% under the proposed change.
Chicago, an American culinary capital, has become one of the biggest battlegrounds in a nationwide debate over tipping. A widening array of businesses are asking for gratuities in recent years as tablet credit-card readers spread, often automatically prompting customers for tips. Some consumers are complaining of tip fatigue as they try to determine what merits a tip, and how much.
The tipping fight is also pitting workers against restaurant companies. Labor activists and some workers say restaurants use tips to subsidize low wages for waitstaff, who they say should make the same minimum wage as other workers. In Illinois and other states, restaurants and other businesses are allowed to pay tipped employees below the minimum wage if their earnings in tips make up the difference.
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