Aldermen attempting to ride a progressive tailwind in Chicago’s new City Council proposed measures Wednesday to advance worker benefits by eliminating a lower minimum wage for tipped employees and allowing workers to accrue more paid leave.
Though past efforts to end the tipped wage have been scuttled, advocates think the timing might be the best yet in Chicago with a champion on City Hall’s fifth floor.
Mayor Brandon Johnson campaigned on the issue and this past weekend donned a One Fair Wage apron and served appetizers in solidarity with servers during a reception at the progressive Netroots Nation conference. Separately, more than half of the 50-member Council — largely members of the body’s more progressive wing — have signed on to expanding the accrual of paid leave up to 15 days.
But the introduction of both items on the same day earned a swift warning from the restaurant industry’s main advocacy group in the state, which said the recovery from the pandemic is still shaky and that such mandates might lead to job losses or restaurant closures.
Still, pro-worker advocacy groups such as One Fair Wage have been pushing to get rid of the tipped minimum wage in several states, arguing that reliance on tips offers little income stability for workers and can force them to endure harassment from customers because they depend on tips for a significant portion of their earnings.
“We know that when our women are on the front lines of their services for tips, that they are subject to sexual harassment. We know that when they’re putting their bodies and health at risk, that they are subject to discrimination,” the measure’s lead sponsor, Ald. Jessie Fuentes, 26th, said at a news conference ahead of Wednesday’s council meeting. “We have a moral obligation to make our people whole, and today we start that fight.”
As of July 1, workers at companies with at least 21 employees earn at least $15.80 an hour, while workers at companies with 20 or fewer employees earn at least $15 an hour. But tipped workers — such as servers at restaurants, bartenders and bellhops — have a minimum wage of $9.48 for larger companies and $9 at smaller ones.
If a tipped worker’s wage with tips on top does not equal at least the full minimum wage, the employer must make up the difference, though advocates say this doesn’t always happen. According to the federal Bureau of Labor Statistics data, bartenders in the greater Chicago area made an average of $16.28 per hour in May 2022, including tips, while waiters and waitresses made $15.53.
Under the proposal introduced Wednesday, which co-sponsor Ald. Carlos Ramirez-Rosa, 35th, said would be phased in over two years, the current tipped wage rate would increase by $3 in July 2024 and would increase again the following July to match the minimum wage rates applied citywide.
The measure comes as hiring difficulties in the bar and restaurant industry continue following the COVID-19 pandemic, when workers said low wages and meager tips fueled their exits. According to a June report from One Fair Wage, there were 6,000 fewer restaurant workers this April compared with February 2020, and 8,000 fewer workers than the Chicago-area industry’s peak in August 2017.
Post-pandemic, some local restaurants did away with tipping policies voluntarily, paying a standard wage and then charging a flat service fee of 20% or 25% to be passed down to servers.
But the head of the Illinois Restaurant Association urged caution following the introduction of the ordinance.
“Obviously the Illinois Restaurant Association strongly urges careful examination and dialogue,” association President Sam Toia told the Tribune. His membership is split: While some have already eliminated the tipped wage, others “think we need a long runway, a long phase-in, not two years,” he said, and still others “think we need to fight this because there are long-term effects on the future of the industry” as well as economic headwinds from a potential recession.
Fuentes said she’s open to negotiating a longer phase-in with the restaurant association, but no longer than four years.
California, Oregon, Washington, Nevada, Montana, Alaska and Minnesota have required a full minimum wage with tips on top “for decades,” One Fair Wage’s Saru Jayaraman said at the news conference, noting ballot initiatives to do away with subminimum wages are underway in Ohio, Michigan, Arizona and Idaho.
When it was introduced, the wage proposal was kicked to the City Council’s Rules Committee, where legislation has typically gone to die or at least face significant delays.
Fuentes called it “a delaying tactic,” and said: “We know that the mayor supports it. We’ll get it out of Rules, early September we’ll hear the matter, and we’re looking for passage in October” during budget discussions. “This is a priority for (Mayor Johnson). It’s not about if — it’s about how.”
“I’ve often said that this administration’s policy will focus on better wages and expanding employment opportunities for the working people of this amazing city,” Johnson said Wednesday as he pledged to work with “all stakeholders” on a final package.
The current tipped wage has “worked against the economic viability of the city of Chicago,” the mayor added. ”This is about investing in people — Black women, brown women, heads of household — because by investing in people, we will strengthen the backbone of our economy.”
While eliminating the minimum wage for tipped workers has been attempted before but stalled multiple times in the council, worker advocacy groups won a citywide paid sick leave policy that took effect in the summer of 2017.
But the paid leave ordinance proposed Wednesday would take it a step further by mandating that employers let workers accrue paid leave for any reason, not just for when they are sick.
Introduced by many of the same progressive council members who want to eliminate the lower minimum wage, the paid leave measure from Ald. Michael Rodriguez, 22nd, calls for workers to earn one hour of paid time off for every 15 hours they work, instead of one hour of paid time off for every 40 hours of work, as under the current law. Workers under the proposal could earn up to 15 paid days off per year rather than the five days per year the current law allows.
The proposal also would mandate all accrued paid time off to be carried over to the following year, and that workers would be paid for unused paid time off when they leave a job. It would also cover “nearly all employees,” not just those working for medium or large employers.
Supporters said the proposed ordinance, if approved, would surpass the state’s paid leave requirements that will begin on Jan. 1. The state law requires up to five days of leave per year.
Also Wednesday, Ald. Gilbert Villegas, 36th, introduced an ordinance to make the city’s guaranteed basic income program permanent.
The city’s program, known as Chicago Resilient Communities Pilot, was paid for with federal coronavirus relief money, and, according to the city, does not have funding to continue after this month.
Under Villegas’ proposal, applicants must be a Chicago resident with at least one dependent who is enrolled in Chicago Public Schools or is not yet old enough to attend schools. Applicants also must have a household income at or below 300% of the federal poverty level and not be employees or elected officials of the city or state. The city would not require disclosure of an applicant’s criminal record or immigration status when determining eligibility.
During the mayoral campaign, Johnson pledged to revive the program as long as it was “intentional” about including those who were formerly incarcerated. With federal funding essentially tapped out, though, it’s unclear how he would secure the $30 million cost in Villegas’ proposal.
The Tribune’s Talia Soglin and Alice Yin contributed.
aquig@chicagotribune.com
