Chicago’s minimum wage will increase to $17.05 per hour for most workers starting July 1, marking a rise from the current $16.60 rate. This wage applies to employees working for businesses with four or more workers and includes all domestic workers, regardless of their employer’s size.

The increase follows the city’s established practice of adjusting the minimum wage annually by approximately 2.5% or the inflation rate, whichever is lower. Although the consumer price index climbed 4.2% over the past year through May, the wage increase does not fully keep pace with rising inflation.

The new minimum wage for tipped workers, such as servers and bartenders, will experience only a modest increase to $12.96 per hour, up from $12.62. Chicago requires that tipped employees make at least the minimum wage when tips are combined with base pay; if tips fall short, employers must cover the difference.

In 2023, Chicago took a significant step by becoming the largest U.S. city to begin phasing out the tipped minimum wage entirely, aiming to eliminate the subminimum wage for tipped workers by 2028. This initiative was driven by concerns over tipped workers’ unstable income and allegations of workplace harassment, and it was championed by Mayor Brandon Johnson as a key element of his early administration.

However, this year the City Council paused the planned annual increases for tipped workers following opposition from the restaurant industry. Critics of the wage hikes argued that the higher labor costs were causing financial strain on restaurants, leading to closures and reduced worker hours. After Mayor Johnson vetoed a City Council proposal that would have abandoned the scheduled increases, aldermen approved a revised plan in May that delays wage hikes for tipped workers by two years for larger restaurants and four years for smaller establishments. As a result, tipped workers will not see a significant hourly wage increase again until 2028, aside from the minimal July adjustment tied to the general minimum wage rise.

In the broader Chicago area, Cook County is also set to raise its minimum wage on July 1 to $15.40 per hour for most workers and $9.25 for tipped employees. Nevertheless, some municipalities within Cook County do not adhere to the county wage law, as they can set their own ordinances. Municipalities currently aligned with the county wage include Barrington Hills, Berwyn, Countryside, Deerfield, Dolton, Evanston, Glencoe, Kenilworth, McCook, Northfield, Oak Brook, Oak Park, Phoenix, Skokie, University Park, Western Springs, Wilmette, and Winnetka.

Outside Cook County, Illinois’ statewide minimum wage remains at $15 for non-tipped workers and $9 for tipped workers, levels that have been in place since January 2025.