An ordinance was established two years ago to slowly increase wages for tipped workers. On Wednesday, a majority of city aldermen voted to halt the automatic increases.
Shortly after the City Council meeting ended, Mayor Brandon Johnson vowed to veto the freeze on tipped wages.
It was bustling Wednesday inside The Dearborn in downtown Chicago, where seven-year server Jose Garcia says he's relieved following a 31-to-18 vote by City Council that halts a promised wage increase for tipped workers like himself.
"Removing the tipped wage - it will just be another nail in the coffin for independent-owned restaurants like here at The Dearborn," Garcia said.
An ordinance was established two years ago to slowly increase wages for tipped workers. But restaurants and small businesses in Chicago say it's left them struggling.
The move is led by a group of aldermen and restaurant leaders with the backing from The Illinois Restaurant Association.
"If tip workers don't make the minimum wage through a combination of their base wage and their tips, their employer is required to make up the difference. Everyone makes at least the minimum wage," Sam Toia, Illinois Restaurant Association president and CEO.
The One Fair Wage ordinance was put in place two years ago to gradually raise the wage of tipped workers over a five-year period.
The current One Fair Wage ordinance phases out sub-minimum wages over five years, and eventually, tipped workers will earn the full minimum wage, plus their tips.
Right now, the hourly wage for tipped workers is $12.62/hour.
Chicago's minimum wage is $16.60 for employers with four or more employees.
The proposal before City Council, however, would freeze the city's tip credit, providing needed stability. Proponents say for restaurants like Bronzeville Winery, facing growing costs and economic uncertainty.
The owner, Eric Williams, said he cannot stay in business if wages continue to increase and City Council doesn't step in.
"Last year, to be very transparent., we lost $60,000," Williams said. "Of that $60,000, $40,000 of that was because of the One Fair Wage and the increase in the minimum wage for tip workers, I put in it's a lot of my own money just to keep the place going," Eric Williams, owner of Bronzeville Winery, said.
"I am really concerned, because I make significantly more from tips than I would from a flat hourly wage, but because restaurants are facing higher base costs, they have had to cut hours," Shanell Oliver, a server at Bronzeville Winery. "I'm working fewer shifts. I'm taking home much less money, which is putting a real strain on my family."
An opposing group of restaurant workers impacted by the proposed wage freeze also rallied at City Hall Wednesday morning, saying this vote could take away raises they were counting on at a time when rent, groceries, childcare and transportation costs continue to rise.
"I find it disgusting that some in City Council would think that it's appropriate to take wages from workers during such an economically and politically volatile time, not just in our city, but in our country," Raegn Draper, executive director of CHAAD Project.
Wednesday's decision came after two rallies were held outside of City Hall, one supporting the measure and the other against it.
"Sub minimum wage is not enough for anyone to live on and to try to freeze it or stop it at this point is inhumane, like rent is ridiculous," bartender Cheryl Taylor said. "Rent has gone up over 40% in the last two years, and if you freeze our wages, how do you expect us to live? Some of us actually go food pantries, to make it week.
Mayor Johnson says active food business licenses have gone up by more than 1,400 since One Fair Wage took effect.
"We can ensure our workers have the support they need and grow business in our city," Johnson said. "And, for these reasons, I will continue to act in my full authority and ensure that this ordinance does not see the full light of day."
City Council's vote was only four votes shy of reaching the threshold needed to avoid a veto by the mayor.
Other business in City Council
The City Council also approved several ordinances Wednesday.
Those included giving the Civilian Office of Police Accountability the power to investigate alleged violations of the welcoming city ordinance by members of Chicago police.
A $27 million settlement to the family of a woman killed during a crash involving a police chase was approved by the full city council.
READ MORE | Chicago Finance Committee approves $27M settlement for family of woman killed in crash involving CPD
City leaders also approved and a new 1.5% tax on hotel stays downtown Chicago. The money will help boost efforts to promote Chicago tourism.