CITY HALL — Proposed legislation to phase out “subminimum wages” for Chicago’s tipped workers received key approval Wednesday from a city committee, clearing it for a City Council vote next month.
The measure passed the city’s Workforce Development Committee with a 9-3 vote Wednesday. Ald. Marty Quinn (13th), Ald. Nicholas Sposato (38th) and Ald. Derrick G. Curtis (18th) voted against the measure.
The One Fair Wage ordinance, introduced to City Council this summer by Ald. Jessie Fuentes (26th), aims to even the playing field for tipped employees by raising their hourly minimum wage to $15.80 an hour, the city’s current minimum wage. If approved, it would phase out the tipped wage system over the next five years.
Currently, tipped workers like restaurant servers can be paid a “subminimum wage,” a base pay that ranges from $9 an hour for employees at smaller companies to $9.48 for those at larger ones, which are then bolstered by on-the-job tips.
If the plan is approved, Chicago would become the largest city to independently phase out subminimum wages for tipped workers, according to the Tribune. California does not allow subminimum wages statewide.
Currently, employers must make up the difference for tipped workers whose hourly wages plus tips do not reach the city’s full minimum wage of $15.80.
If the One Fair Wage Ordinance is approved, wages for tipped workers would increase 8 percent starting July 1, 2024, and continue to rise by 8 percent each year until 2028, when tipped workers would be making the full minimum wage.
Ald. Carlos Ramirez-Rosa (35th), head of the Progressive Caucus that spearheaded the movement, called the approval a big win for restaurant workers across the city.
“This is one fair wage with tips on top,” Ramirez-Rosa said.
Speakers for and against the One Fair Wage ordinance filled council chambers Wednesday.
Seth Blumenthal, director of operations of the cocktail bar Lemon, said he’s willing to pay higher wages to create sustainable careers at his business. He also believes most patrons won’t be aware of the wage increase and will still “tip on top.”
“This allows us to design a business model that ensures we pay our whole team equitably and we can fill in the true cost of food and hospitality in our prices,” Blumenthal said.
Sam Toia, president and CEO of the Illinois Restaurant Association, said that while the association disagrees with the elimination of a subminimum wage, the five-year phase-in plan represents a “middle ground.”
But workers against the change said they are afraid an increase in minimum wage will mean diners will be less inclined to leave a tip.
Destiny Fox, a server Gene & Georgetti, said in an op-ed in Tuesday’s edition of the Sun-Times, she brings home two to three times the city’s required minimum wage on an hourly basis. The wage and tips she currently earns allow her to live Downtown, she told alderpeople at the meeting Wednesday.
“I work hard for my tips. We create experiences for people. I don’t work for minimum wage. [I] work for the tip[s] that I believe I deserve,” Fox said.
Several proponents for the bill also testified during the committee hearing. Restaurants opposed to the ordinance were invited to speak, but opted to send in written comments, said Ald. Michael Rodriguez (22nd), who chairs the Committee on Workforce Development.
Ken Meyer, commissioner of the city’s Department of Business Affairs and Consumer Protection, called the “gradual” five-year phase-in a good compromise.
“[It’s] a compromise that allows businesses, tipped workers and consumers to become accustomed to the change,” Meyer said.
Ald. Brendan Reilly (42nd), who represents Downtown and its many high-profile restaurants, said the push to increase wages for restaurant and bar workers is admirable but he worries it will lead to unintended consequences like increased menu prices, more service charges and reduced hours for workers.
“I’m not criticizing the attempt of the sponsors of this ordinance, I support them in their intent … However, I live in reality and there are consequences when it comes to policy changes,” Reilly said.
Ald. Nicholas Sposato (38th) echoed Reilly’s concerns and said the real issue is people don’t know how to tip. He also worries his border ward will lose restaurants to the suburbs who don’t have to pay servers and bartenders the minimum wage.
“I just think we are creating a problem that’s not really a problem in this industry,” Sposato said.
Ald. Desmon Yancy (5th), who represents parts of Hyde Park, strongly supports the ordinance. Workers should not have to rely on the “kindness of their patrons” to make a living wage, he said.
“Any business model … that requires you to pay people less than a living wage in order to go to work, that’s a slap in the face to the workers,” Yancy said.
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