After much debate, and strong opinions on both sides, the
Chicago City Council approved a minimum wage hike to be phased in over the next
five years. The City Council voted 44-5 today approving an increase to
$13 per hour minimum wage by July 2019.
Some key provisions of the new ordinance include:
- Increases in the minimum wage to $10.00 an hour in July
2015. Minimum wage is currently set at $8.25 per hour.
- Future increases of the minimum wage to $10.50 in July
2016, $11.00 in July 2017, $12.00 in July 2018, and $13.00 in July 2019.
- After July 2019, annual increases will take place based on
the Consumer Price Index and capped at a 2.5% increase per year.
- Employers utilizing the tip credit will also see a hike in
minimum wage. Starting in July 2015, those employers will be permitted to
utilize the tip credit allowed for in the Illinois Minimum Wage Law, but will
need to add $0.50 per hour. In July 2016, tipped employees will be paid
according to the tip credit allowed in the Illinois Minimum Wage Law, but will
need to add $1.00 per hour. Starting in July 2017, and every July
thereafter, tipped employees will be paid the amount from 2016 plus an increase
tied to the Consumer Price Index and capped at 2.5% per year.
- If the federal government or Illinois passes a minimum
wage increase above the City’s minimum wage at any time, the federal or state
minimum wage will supersede the City’s.
- The City will require an additional poster regarding the
City’s Minimum Wage to be posted in a conspicuous place.
- The City has authorized the Department of Business Affairs
and Consumer Protection to enforce City violations, and violations range from
$500-$1,000 per employee, per day.
- The Ordinance also allows for private suits by the
employee to recover damages up to three times the amount of any underpayment,
plus attorneys’ fees and costs.
Proponents of the Ordinance touted the increase as a way to
lift thousands of families above the poverty line, and increase spending power
in communities. They also lamented the fact that no action had been
taken in Springfield or Washington, and action needed to be taken now. The
Raise Chicago Coalition called the Ordinance a major victory and celebrated the
profound impact the raise will have on minimum wage workers. The State of
Illinois voters also passed a referendum this November calling for a $10
minimum wage by 2015 with a 66% vote.
Opponents have criticized the action as devastating to small
businesses. Governor elect Bruce Rauner warned that the minimum wage
could make the city less competitive, and cause it to lose business
nearby communities and Indiana. The Illinois Restaurant Association,
Chicagoland Chamber of Commerce, and Illinois Hotel and Lodging Association
favored a lesser, statewide increase to allow for a level playing field.
Business owners testified that the increase will be devastating to their
businesses. They further testified that small and mid-sized businesses, already
feeling the impact of the Affordable Care Act, will be forced to lay off more
employees. Additionally, the increase will lead to higher demand for City
of Chicago jobs, which may lead to even higher unemployment.
The new ordinance will have vast legal implications for
Illinois businesses. To discuss the impact the ordinance has on your
business, please contact your attorney at Clark Hill PLC.
The entire Ordinance can be found here:
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