Labor Law
Chicago Compliance Reminder: Chicago Tipped Wage Phase-Out
Panko Compliance · July 13, 2026
Chicago passed the One Fair Wage Ordinance in October 2023, phasing out the tipped sub-minimum wage entirely by July 1, 2028. The tipped cash wage rises 8% per year for 5 years until it matches the full city minimum wage. Tips become a true gratuity on top of the full wage, rather than being credited against an employer's wage obligation. Penalties: Failure to pay the current phase rate: back wages owed + 2× liquidated damages + 5% per month interest. Full compliance guide: alerts.getpanko.app/compliance/chicago/tip-credit-and-phaseout
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