City Unveils Minimum Wage Plan, Hope for Tipped Workers

Lawndale News Chicago's Bilingual Newspaper - Business

Lawndale News Chicago's Bilingual Newspaper - Business

By: Ashmar Mandou

Mayor Lori E. Lightfoot on Wednesday introduced a plan to raise the minimum wage in Chicago to $15 per hour by 2021. This ordinance, aims to increase the minimum wage for many Chicago workers currently receiving $13, and aims to help thousands more by eliminating many of the exemptions that exist in the current law. “Today, we are taking an important step to address poverty in our city and bring economic relief to more residents. Increasing Chicago’s minimum wage to $15 an hour by 2021 was a promise I made to residents during the campaign because it is fundamental to our mission of ensuring every Chicagoan has the chance to earn a fair and competitive wage,” said Mayor Lightfoot.

Beginning on July 1, 2020, the minimum wage will increase from the current rate of $13/hour to $14/hour for large businesses. It will again increase to $15/hour for current employees and those at the City’s sister agencies in July 2021. Thereafter, minimum wage will increase annually at a rate commensurate with the consumer price index capped at 2.5 percent annually. Small businesses with 20 or fewer employees, will have an extended timeline to reach the requirements – minimum wage for employees at these enterprises will increase by 50 cents per year, starting in 2020, to reach $15/hour by 2023. Micro-businesses, with fewer than 4 employees, will not be subject to the Minimum Wage Ordinance.

The plan also takes into consideration tipped workers. According to Mayor Lightfoot’s plan, Thousands of tipped workers will also receive a raise in 2020 under the Mayor’s proposal, from $6.40 to $8.40 an hour. Tips can be counted towards the remaining balance for the employee to reach the minimum wage. If the employee does not earn enough in tips to reach the full minimum wage, the employer is required to provide additional pay to make the employer whole. This policy gives restaurant owners and workers the flexibility to meet the demands of their industry while raising the minimum wage. However, the Chicago Progressive Caucus calls for elimination of “sub-minimum” wage for tipped workers.

“From the outset, we have made elimination of the sub-minimum wage a fundamental aspect of this initiative,” said Ald. Sophia King (4), “Tipped workers experience twice the poverty rate of the Chicago workforce and the vast majority of these workers are women and women of color. We have to get this right—it’s about equity and fairness for all workers in Chicago.” The Chicago City Council Progressive Reform Caucus along with the Raise Chicago coalition have worked since 2014 to raising the minimum wage in Chicago to $15 an hour for all workers.

“We have worked on this for over four years. Every step of the way we have been clear this initiative was about making sure that the most vulnerable workers in our city are treated with dignity and have a living wage to take home,” said Ald. Sue Sadlowski-Garza (10), “Closing the gap between tipped and non-tipped employees is a critical piece of this effort. We have to provide relief to the workers who need this most.”

To ensure tipped workers are not left behind, the City’s Department of Business Affairs and Consumer Protection (BACP) will conduct a study of the economic impact of tipped wages and the effectiveness of current enforcement in 2020.

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