Chicago minimum wage increases July 1, 2026, but tipped minimum wage jump delayed
Chicago's minimum wage will rise again on July 1, but for tipped workers the big jump that had been anticipated by the hospitality industry has been delayed.
As of Wednesday, standard minimum wage workers at businesses with four or more employees will see their hourly pay increase to $17.05. Tipped workers will see a more modest increase to $12.96 as long as tips make up the difference to equal the full minimum wage. If tips do not bridge that gap, the employer must make up the difference.
In late May, the Chicago City Council approved a measure delaying much larger raises in the tipped minimum wage for workers like bartenders and restaurant servers for at least two years.
Originally, tipped workers were scheduled to see their minimum pay go up to 84% of the full minimum wage on July 1, 2026. Under the compromise brokered by 27th Ward Ald. Walter Burnett, that increase was pushed back to July 1, 2028.
Tipped workers will then get annual raises in their pay until they reach the full minimum wage on July 1, 2030.
Small businesses – defined as those with up to 21 employees – will get even more time to pay their tipped workers the full minimum wage. Those workers will not get their next city-mandated pay raise until July 1, 2030, and will not reach the full minimum wage until July 1, 2033.
Advocates for the phasing out of tipped minimum wage were disappointed by the delay, but supporters argue it gives the city's bar and restaurant industry, and particularly smaller mom-and-pop businesses, more time to prepare for the increases and keep their often-thin financial margins stable.
