A year after the city raised its minimum wage to surpass both state and federal minimum wages, Berkeley City Council voted Tuesday to draft an ordinance that would raise the wage to $15 an hour by 2020.

The council turned to the city manager to develop a plan that would incrementally increase the minimum wage each year on separate schedules for small and large businesses. The proposal stipulates that by 2018, owners of large businesses will be required to pay their workers $15 an hour, while small businesses will have an extra two years before they are required to raise the minimum wage to the same amount.

When City Council unanimously passed a minimum-wage increase to $10 an hour in May 2014, the ordinance determined a schedule of wage increases until 2016, when it would be capped at $12.53 an hour. But in September, the city’s Commission on Labor proposed an alternative — a living wage — recommending that the council incrementally increase the wage to $19 an hour by 2020.

Faced with both support from many Berkeley residents holding the belief that the minimum wage should provide workers with a sustainable standard of living as well as concern among local businesses trying to keep their operations alive, however, the council decided on Tuesday to strike a compromise.

“At the end of the day, the City Council found the middle-equilibrium spot,” said Councilmember Darryl Moore. “I think it’s a good policy.”

But after more than 100 protesters in support of the living wage rallied outside Longfellow Middle School’s auditorium, where Tuesday’s special meeting was held, some residents felt unsatisfied with the council’s decision.

The demonstrators joined hundreds of other organized efforts nationwide as thousands of workers demanded a living wage, which they argued better supports workers in having their basic needs met.

Michael Pruess, a Berkeley resident and UC Berkeley alumnus who participated in the rally, said the council’s plan to raise the wage to $15 an hour would keep “thousands of workers in poverty.”

Another participant, Morgan Quirk, a Berkeley resident, said he and many others in the city are unable to afford rent increases and high market prices without any increase in the minimum wage.

“You have to work an absurd number of hours just to get by,” Quirk said. “Employers should pay enough for workers to live comfortably.”

During discussions inside, City Council members agreed that the current minimum wage of $11 an hour is insufficient in supporting the city’s workers, yet disagreed over the terms and timeline of a potential wage increase.

Their hesitation stemmed from concerns among other stakeholders — namely local business owners — who spoke at the meeting, warning council members that a potential raise of the minimum wage could force business owners to inflate their prices, which, in turn, could drive away customers from their businesses.

“Under the new minimum wage, I will have to modify my business in order to sustain it,” said Alex Popov, owner of Pappy’s Grill & Sports Bar, at the meeting.

Jess McCarter — the owner of Easy Creole, a store on Alcatraz Avenue — echoed similar concerns, recounting his experience with increasing store prices by 10 percent when he experimented with raising his workers’ wages to mirror the future minimum-wage increase. As a result, McCarter said, his store saw a 15.7 percent drop in customers.

“I don’t want to do this,” McCarter said at the meeting. “I love my staff. But what we can provide to them when we raise our prices … is, unfortunately, fewer hours.”

Moore said that in reaching its consensus to draft the ordinance, the city conducted research on the minimum-wage history of other cities, such as Emeryville.

The council approved the drafting of a new minimum-wage amendment, but a proposal for a paid sick leave ordinance, which was originally on the special-meeting agenda, was deferred until January.

Senior staff writer Bo Kovitz and staff writer Adrienne Shih contributed to this report.