Chicago Tip-Credit Cut Paused: Tipped Cash Wage Holds at $12.62
Chicago employers with tipped workers can leave the tipped cash wage where it is — a previously scheduled July 1 step-up is off — for now. The city’s tip-credit phase-out, which would’ve raised the required cash wage, is paused for two years.
The City Council approved the pause May 20 in a near-unanimous 49-1 vote, and Mayor
Brandon Johnson let it stand — so the July 1 change didn’t take effect.
The bottom line: The tip credit stays at 24% of the $16.60 minimum wage — at least $12.62 an
hour for tipped employees — rather than moving to the scheduled 16% credit.
Employers with more than 21 employees must finish the phase-out by 2030; those with three to 21 employees, by 2033.
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