Minimum Wage Ordinance
On December 2nd, 2014, the Chicago City Council passed an ordinance that will raise the minimum wage for Chicago workers to $13 per hour by 2019. This measure, sponsored by Mayor Rahm Emanuel, Alderman Will Burns, Alderman Pat O’Connor, and 31 other aldermen, will increase the earnings for approximately 410,000 Chicago workers, inject $860 million into the local economy, and lift 70,000 workers out of poverty.
In 2015, the City will begin phasing in its new minimum wage, as provided by the ordinance. This phase-in will help simplify the early years of implementation for businesses and employers. The City's ordinance raises the hourly minimum wage to $10 in 2015, $10.50 in 2016, $11 in 2017, $12 in 2018, and $13 in 2019, indexed annually to the Consumer Price Index (CPI) after 2019.
The ordinance also increases the minimum wage for tipped employees in from the current state minimum of $4.95 to $5.45 in 2015 and $5.95 in 2016, indexed annually to the CPI after 2016.
The full text of Minimum Wage ordinance is available HERE.
|Effective Date||Non-Tipped Employees||Tipped Employees|
|July 1, 2015||$10.00||$5.45|
|July 1, 2016||$10.50||$5.95|
|July 1, 2017||$11.00||Increases with CPI*|
|July 1, 2018||$12.00||Increases with CPI*|
|July 1, 2019||$13.00||Increases with CPI*|
|July 1, 2020||Increases with CPI*||Increases with CPI*|
* The ordinance provides that the minimum wage will not increase when the unemployment rate in Chicago for the preceding year, as calculated by the Illinois Department of Employment Security, was equal to or greater than 8.5 percent. The ordinance also provides that if the CPI increases by more than 2.5 percent in any year, the minimum wage increase shall be capped at 2.5 percent.
To Whom Does the Minimum Wage Ordinance Apply?
≠Time spent traveling in the City that is compensated time, including, but not limited to, deliveries, sales calls, and travel related to other business activity taking place within the City, counts toward hours worked; time spent traveling in the City that is uncompensated commuting time does not.
To Whom Does the Minimum Wage Ordinance NOT Apply?
Other Employer Requirements
Executive Order Increasing the Minimum Wage for City Contractors and Subcontractors
On September 2, 2014, Mayor Emanuel signed an Executive Order requiring all City of Chicago contractors and subcontractors pay their employees a minimum of $13 per hour for work performed under a City contract. On September 30, 2014, the Mayor requested that all City of Chicago sister agencies follow suit. Prior to the passage of the Minimum Wage ordinance, which applies to a far greater number of Chicago employees, four sister agencies had moved to a $13 minimum wage.
The full text of Mayor Emanuel’s Executive Order is available HERE.
Minimum Wage Working Group
On May 20th, 2014, Mayor Emanuel established the Minimum Wage Working Group. The Group was tasked with evaluating options for both short and long-term wage increases for Chicago’s workers. The team of business, labor, advocacy, and elected leaders developed a plan that allows Chicago to move forward with a balanced proposal that gives a boost to workers, small business owners, and the City. The Mayor asked the group to study wage increase plans pursued by other cities to create a proposal that includes a real wage increase for all minimum wage employees in the short term; accounts for cost of living increases by tying future increases to inflation; and covers tipped employees.
On July 8th, 2014, the Working Group submitted its final report recommending that the City establish a minimum wage of $13 by 2018. The full text of the report is available HERE.
Public Engagement Process
Mayor Emanuel requested that the Working Group deliver a final report in July. To ensure that its recommendations reflected the broadest range of input, the Working Group held five public meetings attended by hundreds of residents from across the city and consulted an array of experts and stakeholders. In addition, the group received over 200 comments via its online portal.
Working Group Members
The Minimum Wage Working Group was chaired by John Bouman, President, Sargent Shriver Center on Poverty Law, and Will Burns, Alderman of the 4th Ward. Members include: