OFFICE OF THE MAYOR
CITY OF CHICAGO
RAHM EMANUEL
MAYOR
December 2, 2014
TO THE HONORABLE, THE CITY COUNCIL OF THE CITY OF CHICAGO
Ladies and Gentlemen:
I transmit herewith, together with Aldermen Patrick O'Connor, Burns, Dowell, Hairston, Sawyer, Holmes, Harris, Beale, Balcer, Cardenas, Thompson, Thomas, Lane, Cochran, Brookins, Chandler, Solis, Burnett, Graham^ Reboyras, Suarez, Mell, Austin, Colon, Sposato, Mitts, Cullerton, Laurino, Cappleman, Pawar, Osterman, Moore and Silverstein, an ordinance regarding the minimum wage.
Your favorable consideration of this ordinance will be appreciated.
Mayor
Very truly yours,
ORDINANCE
WHEREAS, The City of Chicago is a home-rule unit of government under Article VII, Section 6(a) of the 1970 Constitution of the State of Illinois and, as such, may exercise any power and perform any function pertaining to its government and affairs; and
WHEREAS, Promoting the welfare of those who work within the City's borders is an endeavor that plainly meets this criterion; and
WHEREAS, After years of inaction by the United States Congress, it is time for cities and states to lift families out of poverty and stimulate the economy by raising the minimum wage; and
WHEREAS, A coalition of advocates and elected Illinois officials are leading an effort in Springfield to raise the state minimum wage, but,,due to Chicago's higher cost of living, the proposed state increase is not enough; and
WHEREAS, Enacting a minimum wage for workers in Chicago that exceeds the state minimum wage is entirely consistent with the Illinois General Assembly's finding that |t "is against public policy for an employer to pay to his employees an amount less than that fixed by" the Illinois Minimum Wage Law, 820. ILCS 105/2; and
WHEREAS, On May 20, 2014, Mayor Rahm Emanuel appointed a diverse group of community, labor, and business leaders, representing a cross-section of the numerous perspectives on this issue, and tasked them with developing a balanced proposal to raise the minimum wage for Chicago's workers; and
WHEREAS, The Minimum Wage Working Group held a series of meetings to hear evidence from and discuss the issue with a wide array of experts and stakeholders, convened;fiye community meetings attended by hundreds of City residents, and received more than 200 public comments via the City's website; and
WHEREAS, On July 8, 2014, the Minimum Wage Working Group released its report, finding, among other things, that rising inflation has outpaced the growth in the minimum wage, leaving the true value of llliriois's current minimum wage of $8.25 per hour 32 percent below the 1968 level of $10.71 per hour (in 2013 dollars); and
WHEREAS, As the value of wages decline, the Great Recession has brought more families to the brink of economic collapse - according to the U.S. Census, 22.1 percent of Chicagoans live below the poverty level, compared to 13.7 percent ofthe Illinois population and 14.9 percent ofthe national population; and
WHEREAS, In Chicago, rent as a percentage of income has risen to 31 percent, from a historical average of 21 percent, and, according to U.S. Commerce Department data, Chicagoland is the only metropolitan region in Illinois that ranks above the national average in cost-of-living expenses; and
WHEREAS, Nearly 31 percent of the Chicago workforce makes $13.00 per hour or less - the median age of these workers is 33, two-thirds are over the age of 25, and a disproportionate share are women and/or minorities; and
WHEREAS, The increasing unaffordability of life in Chicago for so many of its residents illustrates the profound degree of wage inequality that President Barack Obama has described as "the defining issue of our time," and
WHEREAS, The weight of research on previous minimum wage increases shows that raising the minimum wage has little or no adverse impact on employment and prices - to the contrary, according to the Economic Policy Institute, raising the minimum wage will help the economy at large, because workers' increased spending power will increase our nation's gross domestic product by about $33 billion and create approximately 140,000 jobs; and
WHEREAS, The Minimum Wage Working Group found that a 42 percent increase in the local minimum wage to $13.00 per hour, phased in over five years, will increase earnings for 36 percent of Chicago workers, boost the local economy by more than $860 million, and lift roughly 70,000 Chicagoans out of poverty, including more than 5,000 single mothers; and
WHEREAS, The Minimum Wage Working Group further found that phasing in the wage increase over time will allow businesses to adjust, arid result in reasonable annual increases in expenses, ranging from approximately 0.1 to 1.5 percent each year; now, therefore,
BE IT ORDAINED BY THE GITY COUNCIL OF THE C|TY OF CHICAGO:
SECTION 1. The foregoing recitals, as well as, the report of Mayor Rahm Emanuel's Minimum Wage Working Group - "A Fair Deal for Chicago's Working Families: A Proposal To Increase the Minimum Wage" - are hereby incorporated as the findings ofthe City Council.
SECTION 2. Section 2-25-050 ofthe Municipal Code of Chicago is hereby amended by deleting the language stricken and inserting the language underscored, as follows: .
2-25-050 Powers and duties of the department.
COmitted text is not affected by this ordinance)
(b) Powers and duties of the commissioner and the department. The powers and duties of the commissioner and department shall be as follows:
(Omitted text is not affected by this ordinance)
(19) To supervise the investigation, execution,, and enforcement of the Chicago Minimum Wage Ordinance, Chapter 1.-24 of this Code, the Toy Safety Ordinance, Chapter 7-36 of this Code,-and the Condominium Ordinance, Chapter 13-72 of this Code, and any other ordinance administered or enforced by the department, including all rules or regulations pertaining thereto or promulgated thereunder;
(Omitted text is not affected by this ordinance)
SECTION 3. Section 2-92-320 ofthe Municipal Code of Chicago is hereby amended by deleting the language stricken and inserting the language underscored, as follows:
2-92-320 Ineligibility for city transactions - Other offenses.
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(a) No person or business entity shall participate in a transaction as defined herein, and may have its current transactions permanently or temporarily suspended or canceled, if that person or business entity:
(Omitted text is not affected by this ordinance)
- has violated any regulation promulgated by the chief procurement officer that includes ineligibility as a consequence of its violations or
- has committed, within a 24-month period, three or more violations of Chapter 1-24 of this Code.
(Omitted text is not affected, by this ordinance)
SECTION 4. Section 2-92-610 ofthe Municipal Code of Chicago is hereby amended by inserting the language underscored, as follows:
2-92-610 Contracts requiring a base wage.
(Omitted text is not affected by this ordinance)
B. Every contract of every eligible contractor shall contain a provision or provisions stipulating the wages required to be paid to the employees listed under paragraph A.1., and each such contract shall further contain provisions obligating the contractor or subcontractor of such contractor to pay its employees on work thereunder not less than the base wage, or the minimum hourly wage required under chapter 1-24 of this Code, whichever is greater.
(Omitted text is not affected by this ordinance)
SECTION 5. Title 1 of the Municipal Code of Chicago is hereby amended by adding a new chapter 1-24, as follows:
CHAPTER 1-24 THE CHICAGO MINIMUM WAGE ORDINANCE
1-24-010 Definitions.
For purposes of this chapter, the following definitions apply:
"Commissioner" means the commissioner of business affairs and consumer protection.
"Covered Employee" means anv Employee who is not subject to any of the exclusions set out in Section 1-24-050 below, and who, in anv particular two-week period, performs at least two hours of work for an Employer while physically present within the geographic boundaries ofthe City. For purposes of this definition, 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, shall constitute work while physically present within the geographic boundaries ofthe City: however, time spent traveling in the City that is uncompensated commuting time shall not constitute work while physically present within the geographic boundaries of the City.
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"CPI" means the Consumer Price Index for All Urban Consumers most recently published by the Bureau of Labor Statistics of the United States Department of Labor.
"Domestic worker" means a person whose primary duties include housekeeping; house cleaning; home management; nanny services, including childcare and child monitoring; caregiving, personal care or home health services for elderly persons or persons with illnesses, injuries, or disabilities who reguire assistance in caring for themselves; laundering; cooking; companion services; chauffeuring; and other household services to members of households or their guests in or about a private home or residence, or any other location where the domestic work is performed.
"Employee," "Gratuities, and "Occupation" have the meanings ascribed to those terms in the Minimum Wage Law, with the exception that all Domestic Workers- including Domestic Workers employed by Employers with fewer than 4 employees, shall fall under the definition of the term "Employee."
"Employer" means any individual, partnership, association, corporation, limited liability company, business trust, or any person or group of persons that gainfully employs at least one Covered Employee. To gualifv as an Employer, such individual, group, or entity must (1) maintain a business facility within the geographic boundaries of the City and/or (2) be subject to one or more ofthe license requirements in Title 4 of this Code.
"Fair Labor Standards Act" means the United States Fair Labor Standards Act of 1938, 29 U.S.C. $ 201 et seg., in force on the effective date of this chapter and as thereafter amended.
"Minimum Wage Law" means the Illinois Minimum Wage Law, 820 ILCS 105/1 et seg., in force on the effective date of this chapter and as thereafter amended. -
"Sister Agency" means the Chicago Public Schools, the Chicago Park District, the Chicago Transit Authority, the City Colleges of Chicago, the Chicago Housing Authority, and the Public Building Commission.
"Subsidized Temporary YOuth Employment Program" means any publicly subsidized summer or other temporary youth employment program through which persons aged 24 or younger are employed by, or engaged in employment coordinated by, a nonprofit organization or governmental entity.
"Subsidized Transitional Employment Program" means anv publicly subsidized temporary employment program through which persons with unsuccessful employment histories and/or members of statistically hard-to-emplov populations (such as formerly homeless persons, the long-term unemployed, and formerly incarcerated persons) are provided temporary paid employment and case-managed services, under a program administered by a nonprofit organization or governmental entity, with the goal of transitioning program participants into unsubsidized employment.
"Tipped Employee" has the meaning ascribed that term in the Fair Labor Standards Act.
"Wage" means compensation due an Employee by reason of his employment.
1-24-020 Minimum Hourly Wage.
Except as provided in Sections 2-92-610 and 1-24-030 of this Code, every Employer shall pay no less than the following Wages to each Covered Employee for each hour of work performed for that Employer while physically present within the geographic boundaries of the City:
- Beginning on July 1, 2015, the greater of: (1) the minimum hourly Wage set by the Minimum Wage Law: (2) the minimum hourly Wage set by Fair Labor Standards Act; or (3) $10.00 per hour.
- Beginning on July 1, 2016, the greater of: (1) the minimum hourly Wage set by the Minimum Wage Law, (2) the minimum hourly Wage set by the Fair Labor Standards Act; or (3) $10.50 per hour.
- Beginning on July 1, 2017, the greater of: (1) the minimum hourly Wage set by the Minimum Wage Law: (2) the minimum hourly Wage set by the Fair Labor Standards Act; or (3) $11.00 per hour.
- Beginning on July 1, 2018, the greater of: (1) the minimum hourly Wage set by the Minimum Wage Law; (2) the minimum hourly Wage set by the Fair Labor Standards Act: or (3) $12.00 per hour.
- Beginning on July 1, 2019, the greater of: (l)the minimum hourly Wage set by the Minimum Wage Law; (2) the minimum hourly Wage set by the Fair Labor Standards Act; or (3) $13.00 per hour.
- Beginning on July 1, 2020. and on every July 1 thereafter, the greater of: (1) the minimum hourly Wage set by the Minimum Wage Law; (2) the minimum hourly Wage set by the Fair Labor Standards Act; or (3) the City's minimum hourly Wage from the previous year, increased in proportion to the increase, if any, in the CPI, provided, however, that if the CPI increases by mqrethan 2.5 percent in any vear, the City minimum Wage increase shall be capped at 2.5 percent, and that there shall be no City minimum Wage increase in anv vear when the unemployment rate in Chicago for the preceding year, as calculated by the Illinois Department of Employment Security, was egual to or greater than 8.5 percent. Anv increase pursuant to subsection 1 -24-020(f)(3) shall be rounded up to the nearest multiple of $0.05. Anv increase pursuant to subsection 1r24-020(f) shall remain in effect until anv subseguent adjustment is made. On or before June 1. 2020, and on Or before every June 1 thereafter, the commissioner shall make available to Employers a bulletin announcing the adjusted minimum hourly Wage for the upcoming year.
1-24-030 Minimum Hourly Wage In Occupations Receiving Gratuities.
(a) Every Employer of a Covered Employee engaged in an Occupation in which Gratuities have customarily and usually constituted part ofthe remuneration shall pay no less than the following Wages to each Covered Employee for each hour of work performed for that Employer while physically present within the geographic boundaries ofthe City:
- Beginning on July 1, 2015, the greater of: (A) the minimum hourly Wage set by the Fair Labor Standards Act for Tipped Employees, plus an additional $0.50 per hour; or (B) the minimum hourly Wage set by the Minimum Wage Law for workers who receive Gratuities, plus an additional $0.50 per hour.
- Beginning on July 1, 2016, the greater of: (A) the minimum hourly Wage set by the Fair Labor Standards Act for Tipped Employees, plus an additional $1.00 per hour; or (B) the minimum hourly Wage set by the Minimum Wage Law for workers who receive Gratuities, plus an additional $1.00 per hour.
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(3) Beginning on July 1, 2017, and on every July 1 thereafter, the greater of (A) the minimum hourly Wage set by the Fair Labor Standards Act for tipped workers; (B) the minimum hourly Wage set by the Minimum Wage Law for workers who receive Gratuities; or (C) the City's minimum hourly Wage from the previous year for workers who receive Gratuities, increased in proportion to the increase, if anv, in the CPI, provided, however, that if the CPI increases by more than 2.5 percent in any year, the City minimum Wage increase for workers who receive Gratuities shall be capped at 2.5 percent, and that there shall be no City minimum Wage increase for workers who receive Gratuities in any year when the unemployment rate in Chicago for the preceding year, as calculated by the Illinois Department of Employment Security, was egual to or greater than 8.5 percent. Anv increase pursuant to subsection 1-24-030(a)(3)(C) shall be rounded up to the nearest multiple of $0.05. Any increase pursuant to subsection 1-24-030(a)(3) shall remain in effect until any subseguent adjustment is made. Qn or before June 1, 2017, and on or before every June 1 thereafter, the commissioner shall make available to Employers a bulletin announcing the City's minimum hourly Wage for the upcoming vear for workers Who receive Gratuities.
(b) Each Employer that pays a Covered Employee the Wage described in subsection 1-24-030(a) shall transmit to the commissioner, in a manner provided by regulation, substantial evidence establishing: (1) the amount the Covered Employee received as Gratuities during the relevant pay period; and (2) that no part of that amount was returned to the Employer. If an Employer is reguired by the Minimum Wage Law to provide substantially similar data to the Illinois Department of Labor, the commissioner may allow the Employer to comply with this subsection 1-24-030(b) by filing a copy of the state documentation.
. 1-24-040 Overtime compensation.
The Wages set out in Sections 1-24-020 and 1-24-030 are subject to the overtime compensation provisions in the Minimum Wage Law, with the exception that the definitions of "Employer" and "Employee" in this chapter shall apply.
1-24-050 Exclusions.
This chapter shall not apply to hours worked:
- By anv person subject to subsection 4(a)(2) of the Minimum Wage Law, with the exception that the categories of Employees described in subsections 4(a)(2)(A) and 4(a)(2)(B) of the Minimum Wage Law shall be entitled to the Wages described in Sections 1-24-020 and' 1-24-030 above, whichever applies, as well as the overtime compensation described in Section 1-24-040.
- By any person subject to subsection 4(a)(3), subsection 4(d), subsection 4(e), Section 5, or Section 6 of the Minimum Wage Law.
- For anv governmental entity other than the City, a category that, for purposes of this chapter, includes, but is not limited to, anv Sister Agency, any unit of local government, the Illinois state government, and the government ofthe United States, as well as anv other federal, state, or local governmental agency or department;
- For anv Subsidized Temporary Youth Employment Program; or
- For anv Subsidized Transitional Employment Program. 1-24-060 Application to Collective Bargaining Agreements.
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Nothing in this chapter shall be deemed to interfere with, impede, or in any way diminish the right of employees to bargain collectively with their employers through representatives of their own choosing in order to establish wages or other conditions of work in excess of the applicable minimum standards of the provisions of this chapter. The reguirements of this chapter may be waived in a bona fide collective bargaining agreement, but only if the waiver is set forth explicitly in such agreement in clear and unambiguous terms.
1-24-070 Notice and Posting.
- Every Employer shall post in a conspicuous place at each facility where any Covered Employee works that is located within the geographic boundaries of the City a notice advising the Covered Employee of the current minimum Wages under this chapter, and of his rights under this chapter. The commissioner shall prepare and make available a form notice that satisfies the reguirements of this subsection 1-24-070(a). Employers that do not maintain a business facility within the geographic boundaries ofthe City and households that serve as the worksites for Domestic Workers are exempt from this subsection 1-24-070(a).
- Every Employer shall provide with the first paycheck subject to this chapter issued to a Covered Employee a notice advising the Covered Employee ofthe current minimum Wages-under this chapter, and of the Employee's rights under this chapter. The commissioner shall prepare.and make available a form notice that satisfies the reguirements of this subsection 1r24-07Q(b).
1 -24-080 Retaliation Prohibited.
It shall be unlawful for any Employer to discriminate in any manner or take anv adverse action against any Covered Employee in retaliation for exercising anv right under this chapter, including, but not limited to, disclosing, reporting, Or testifying about anv violation of this chapter or regulations promulgated thereunder. For purposes of this Section, prohibited adverse actions include, but are not limited to, unjustified termination, unjustified denial of promotion, unjustified negative evaluations, punitive schedule changes, punitive decreases in the desirability of work assignments, and other acts of harassment shown to be linked to such exercise of rights.
1-24-090 Enforcement - Regulations.
The department of business affairs and consumer protection shall enforce this chapter, and the commissioner is authorized to adopt regulations for the proper administration and enforcement of its provisions.
1-24-100 Violation - Penalty.
Any Employer who violates this chapter or anv regulation promulgated thereunder shall be subject to a fine of not less than $500.00 nor more than $1,000.00 for each offense. Each day that a violation continues shall constitute a separate and distinct offense to which a separate fine shall apply.
1 -24-110 Private Cause of Action.
If anv Covered Employee is paid by his Employer less than the Wage to which he is entitled under this chapter, the Covered Employee may recover in a civil action three times the amount of any such underpayment, together with costs and such reasonable attorney's fees as the court allows. An
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agreement by the Covered Employee to work for less than the Wage required under this chapter is no defense to such action.
SECTION 6. Section 4-4-320 of the Municipal Code of Chicago is hereby amended by deleting the language struck through and by adding the language underscored, as follows:
4-4-320 License denial, revocation or suspension for certain offenses.
(a) The commissioner, for good and sufficient cause, may deny an application for any license issued under this Title 4 if^ur-iBG^e^-year-pewed-pr^r^o^fl applicant adrffltte4^uilt-or44ability-or-has^ r^eeedlflg-ofHSommitting-or-attempting to commit:
- during the 5-year period prior to the date of the application, the applicant admitted guilt or liability or has been found guilty or liable in any judicial or administrative proceeding of committing-or attempting to commit a wilful violation, or two or more violations which do not include a wilful violation, of the Illinois Wage Payment and Collection Act, 820 ILCS 115/1, or any other federal or state law regulating the payment Of wages; or
- during the 5-year period prior to the date of the application, the applicant admitted guilt or liability or has been found guilty or liable in anv judicial or administrative proceeding of committing or attempting to commit a violation ofthe Fair Debt Collection Practices Act, 15 U.S.C. §1692 or the Collection Agency Act, 225 ILCS 425/1,.or any other federal or state law regulating the collection of debts or
- . during the 24-month period prior to the date of the application, the applicant admitted guilt or liability or has been found guilty or liable in anv judicial or administrative proceeding of committing three or more violations of Chapter 1.-24. of this Code.
(Omitted text is not affected by this ordinance)
SECTION 7. This ordinance shall take effect 10 days after its passage and publication.
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