Minimum Wage for Servers in Illinois: Rates, Tips, and Chicago Rules

In Illinois, the minimum wage for servers and other tipped workers is $9.00 per hour in direct pay from your employer, which is 60% of the state’s $15.00 standard minimum wage.¹ Your tips are supposed to make up the remaining $6.00 gap, and if they don’t, your employer owes you the difference. Chicago and much of suburban Cook County set their own higher rates, so where you work inside Illinois matters.

The State Rate and Who It Covers

Under the Illinois Minimum Wage Law (820 ILCS 105/4), employers can pay tipped workers 60% of the standard minimum wage and count customer tips toward the other 40%.² With the standard rate at $15.00 per hour since January 1, 2025, that puts the tipped cash wage at $9.00. No further scheduled increases are on the books.

The tip credit only applies when tips are a customary part of the job, and your employer has to be able to show the tips claimed were actually received by you during the pay period.² Federal law defines a “tipped employee” as someone who regularly receives more than $30 per month in tips.³ If you don’t clear that, the tip credit doesn’t apply and you’re owed the full $15.00.

Workers under 18 who log fewer than 650 hours in a calendar year have a separate minimum of $13.00.¹ Once a young worker crosses 650 hours or turns 18, the standard $15.00 rate applies and the tipped rate steps up to $9.00.

Chicago Pays More, and the Tip Credit Is Going Away

Chicago sets its own minimum wage by ordinance. As of July 1, 2025, tipped workers at businesses with four or more employees earn at least $12.62 per hour in direct pay.⁴ The ordinance covers anyone who works at least two hours inside the city limits during a two-week period.⁵

Chicago is also phasing out its tip credit on a fixed schedule. The credit drops each July:

July 1, 2025: tip credit reduced to 24% of the Chicago minimum wage
July 1, 2026: reduced to 16%
July 1, 2027: reduced to 8%
July 1, 2028: eliminated entirely, meaning tipped workers earn the full Chicago minimum wage⁶

Chicago’s base minimum also adjusts every July 1 using CPI, capped at 2.5% per year.⁷ Because the tipped rate is a percentage of that base, both numbers shift when the CPI adjustment hits.

Suburban Cook County

In suburbs outside Chicago that fall under the Cook County Minimum Wage Ordinance, the tipped minimum is $9.00 per hour and the standard minimum is $15.00 as of July 1, 2025.⁸ The county adjusts on July 1 each year using the highest of the federal rate, the Illinois rate, or its own CPI calculation.

Many Cook County municipalities have opted out of the ordinance. The county itself says the opt-out list “changes frequently” and points workers to their local village, township, or city for confirmation.⁸ If your town has opted out, you fall back on the state rate, which for the tipped wage is currently the same $9.00.

When Your Tips Don’t Reach the Minimum

The tip credit is conditional, not a discount on your labor. Your employer pays $9.00 directly, and if your tips don’t bring your total to at least $15.00 per hour (or the applicable Chicago rate), your employer must pay the shortfall. The math runs across the entire pay period, not shift by shift. A dead Tuesday and a busy Friday get combined before your employer decides whether you’re owed a make-up payment.⁴

This is where most violations happen. Some employers don’t do the math correctly; others do and hope you won’t check. The law doesn’t care about intent. The money is still owed.

Overtime for Tipped Workers

Overtime starts after 40 hours in a workweek, and the rate is built from the full minimum wage, not the tipped cash wage. In Illinois that works out to:

Regular rate: $15.00 per hour ($9.00 cash wage plus the $6.00 tip credit)
Overtime rate: $15.00 × 1.5 = $22.50 per hour
Cash you actually receive: $22.50 − $6.00 tip credit = $16.50 per hour in direct pay⁸

The tip credit applied to overtime hours cannot exceed the credit used during regular hours.⁹ If your tips during overtime don’t get you to $22.50, the employer still owes the difference.

Your Tips Are Yours

Federal law is direct: an employer cannot keep tips received by employees for any purpose.³ That covers credit card processing fees, breakage, register shortages, and every other business expense.¹⁰

Tip pooling is allowed with limits. When your employer takes a tip credit, only workers who customarily receive tips can be in the pool: other servers, bartenders, bussers. Not cooks, dishwashers, or back-of-house staff. When the employer pays the full minimum wage and takes no tip credit, the pool can include non-tipped workers like kitchen staff.¹¹ Managers, supervisors, and owners cannot keep any share of employee tips under any circumstances, though a manager who personally serves a table can keep the tip from that specific customer.¹⁰

One boundary worth knowing: an automatic gratuity on a large party is not a tip. The IRS treats it as a service charge, which becomes regular wages when distributed to you, and doesn’t count toward the tip credit.¹²

Your Employer Has to Tell You About the Tip Credit

Before your employer can use the tip credit at all, they must inform you of the cash wage being paid, the credit amount being claimed, the fact that the credit can’t exceed your actual tips, and that you keep all tips except through a valid pool. The notice can be oral or written. Skip it, and the employer loses the right to take the credit entirely, meaning they owe you the full minimum wage for every hour worked. If there’s a tip pool, your employer also has to tell you the required contribution amount, and pooled tips must be distributed to eligible workers by the regular payday.¹³

If You’re Being Underpaid

Illinois wage penalties are stiff. In a civil suit, you can recover three times the unpaid amount plus attorney’s fees and court costs, and the statute adds 5% of the underpayment for each month the violation continues.² The Illinois Department of Labor can also act directly against the employer, and for willful or repeated violations can impose a penalty of up to 20% of the underpayment plus a flat $1,500 fine. Private suits must be filed within three years; the department has five.

You can file a wage claim with the Illinois Department of Labor online after creating an Illinois Public ID account, and you can check the status of the claim through the same portal.¹⁴ Paper claims by mail or fax still work but take much longer. Before you file, pull together your pay stubs, schedules, and any tip records you kept. Illinois law prohibits retaliation against workers who file wage complaints.

1
Illinois Department of Labor. Minimum Wage Law
2
Justia Law. Illinois Code 820 ILCS 105 – Minimum Wage Law
3
Office of the Law Revision Counsel. 29 USC 203 – Definitions
4
City of Chicago. Minimum Wage
5
City of Chicago. Chicago Minimum Wage and Paid Sick Leave Rules
6
City of Chicago. Chicago Office of Labor Standards – Minimum Wage Fact Sheet
7
American Legal Publishing. Municipal Code of Chicago 6-105-020 – Minimum Hourly Wage
8
Cook County Government. Minimum Wage Ordinance and Regulations
9
U.S. Department of Labor. FLSA Overtime Calculator Advisor
10
eCFR. 29 CFR 531.52 – General Restrictions on an Employers Use of Its Employees Tips
11
U.S. Department of Labor. Tip Regulations Under the Fair Labor Standards Act
12
Internal Revenue Service. Tips Versus Service Charges – How to Report
13
U.S. Department of Labor. Fact Sheet – Tipped Employees Under the Fair Labor Standards Act
14
Illinois Department of Labor. Unpaid Wages