CHICAGO — Chicago’s minimum wage will rise to $15 by 2021 and apply to youth, people with disabilities and other groups that historically have been paid less, but restaurant servers and other tipped workers will continue to receive a subminimum wage.
Chicago’s City Council on Tuesday approved a plan proposed by Mayor Lori Lightfoot that brings Chicago to $15 per hour, up from $13 currently, four years ahead of when the state is set to get to that threshold. Small businesses will have more time to comply.
The plan, included in a management ordinance tied to Lightfoot’s first budget, tried to balance the interests of worker advocates against those of restaurant industry groups that staunchly opposed an earlier proposal to eliminate the subminimum wage for tipped workers.
Lightfoot’s plan raises the subminimum wage for tipped workers to $8.40 per hour next year, from $6.40 currently, and directs the city to study the impact of tipped wages on working-class families so it can revisit the issue. The tipped wage will be set at 60% of the minimum wage and increase accordingly as the minimum wage rises annually with the consumer price index.
Her compromise angered activists who pushed to get rid of the subminimum wage for tipped workers, some of whom struggle to make ends meet. Employers are legally required to make up the difference if an employee’s tips don’t add up to the regular minimum wage, but worker advocates say that doesn’t always happen because of exploitative practices or shoddy record keeping.
“I’m just really disappointed that the city of Chicago doesn’t understand that all tipped workers are not tipped the same,” said Honni Harris, 46, who worked as a server in Chicago restaurants and clubs for 24 years and now is an activist with the Restaurant Opportunities Center, which advocates for scrapping the tipped wage. “There are workers who can bring home $600 in a weekend, but what about those workers who are working at the pancake house, or at Denny’s? They can’t pay their rent.”
Lightfoot’s office previously explained that the mayor decided a jump to $15 for tipped workers would be too “dramatic” a change, especially for small restaurants. The business model of many restaurants in the city is based on customer tips subsidizing employee wages.
Lightfoot’s plan eliminates exemptions to the minimum wage for other workers, including people with disabilities, youth under 18, agricultural workers and people in transitional employment programs.
People with disabilities, for whom there is currently no wage floor, will have to be paid the city’s minimum wage by 2024. Youths under 18, who currently can be paid as little as $7.75 an hour, will have to be paid $10 by next year and the full minimum wage by 2025.
For everyone else, the minimum wage will rise to $14 an hour next year and $15 the year after.
Smaller employers with fewer than 20 workers will have until 2023 to get to $15. Businesses with fewer than four employees are exempt.