Illinois Bill Could Seize Tipped-Wage Control from Chicago

Proposed legislation would prevent local governments from setting rules regarding tips counting towards hourly wages.

Mar. 29, 2026 at 5:39am

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Illinois lawmakers have advanced a measure, House Bill 4263, that would strip cities like Chicago of the power to raise wages for tipped workers. The bill would make regulation of the tip credit an exclusive power of the Illinois state government, potentially halting Chicago's push to phase out the subminimum wage for tipped employees.

Why it matters

This bill represents a clash between state and local control over labor policies. Chicago has been working to gradually eliminate the tipped minimum wage, but this state-level preemption could undermine the city's efforts to improve wages for service industry workers.

The details

House Bill 4263 would prevent local governments from setting rules regarding tips counting towards an hourly wage. This would make regulation of the tip credit an exclusive power of the Illinois state government. The bill could halt Chicago's plan to phase out the subminimum wage for tipped workers under the city's 2023 One Fair Wage ordinance.

  • House Bill 4263 was advanced by Illinois lawmakers in March 2026.
  • Chicago Mayor Brandon Johnson vetoed a city council vote to stop the 2023 One Fair Wage ordinance on Wednesday afternoon.

The players

House Bill 4263

A measure advanced by Illinois lawmakers that would strip cities like Chicago of the power to raise wages for tipped workers.

Brandon Johnson

The mayor of Chicago who vetoed a city council vote to stop the 2023 One Fair Wage ordinance.

Sam Toia

The president and CEO of the Illinois Restaurant Association, who testified in favor of House Bill 4263.

Jeremy Rosen

A representative from the Workers Center for Racial Justice, who testified against House Bill 4263.

Lilian Jiménez

A Democratic state representative from Chicago who spoke passionately against House Bill 4263 in committee.

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What they’re saying

“It guarantees that every worker earns at least the full minimum wage while allowing tips to remain an important part of income for servers, bartenders, and support staff. This is extremely important considering how, as of now, the tip credit can vary widely from one place to another.”

— Sam Toia, President and CEO, Illinois Restaurant Association

“This is called preemption and it stifles the type of local innovation that has frequently led to pro-worker laws covering the entire state. Typically, instead of enacting preemption bills, this committee and the General Assembly have seen state labor laws as a floor, not a ceiling.”

— Jeremy Rosen, Workers Center for Racial Justice

“I know how this works and I'm telling you that people go home from a hard day's work and do not have a penny to show for it. And for us to come here in this moment and say we're going to make that life worse for them is a disappointment.”

— Lilian Jiménez, State Representative, Democrat from Chicago

What’s next

The Illinois General Assembly will continue to debate and vote on House Bill 4263. If passed, the bill would then go to the governor for signature or veto.

The takeaway

This legislation represents a clash between state and local control over labor policies, with the state seeking to preempt Chicago's efforts to raise wages for tipped workers. The outcome could have significant implications for service industry employees in Illinois.