Illinois Minimum Wage Law – In a Nutshell
Illinois workers rung in the New Year with an hourly raise. In February of 2019, Governor J.B. Pritzker signed a bill passed by the Senate that sets a gradual increase on the current minimum wage, reaching a total increase to $15.00 per hour in 2025.
The new minimum wage laws began on January 1st, 2020 with an increase from $8.25 per hour to $9.25 per hour. The next increase is set for July 1st, 2020 to $10.00 per hour. We have included the table below to outline the scheduled wage increases.
| DATE | HOURLY WAGE |
| 1/1/20 | $9.25 |
| 7/1/20 | $10.00 |
| 1/1/21 | $11.00 |
| 1/1/22 | $12.00 |
| 1/1/23 | $13.00 |
| 1/1/24 | $14.00 |
| 1/1/25 |
$15.00 |
Under the old law, workers under age 18 AND working 650 hours or less in a calendar year could be paid $.50 per hour less than the applicable minimum wage until 12/31/19.
Example: $8.25 – $.50 = $7.75
Under the new law, workers under 18 working less than 650 hours in a calendar year can be paid under the following rules:
| DATE | HOURLY WAGE |
| 1/1/20 | $8.00 |
| 1/1/21 | $8.50 |
| 1/1/22 | $9.25 |
| 1/1/23 | $10.50 |
| 1/1/24 | $12.00 |
| 1/1/25 | $13.00 |
When it comes to tipped employees, they will have a minimum wage of 60% of the applicable wage as long as tips plus wages equals the current wage standard.
Tax Credit
You may have heard rumors of a tax credit for certain employers under the new regulations. The guidelines for earning this credit are…
- If the employer has 50 or fewer full-time employees (FTE) who make minimum wage,
- whose average wages for employees earning less than $55,000 per year during reporting period exceeds the average wage paid for employees making less than $55,000 during same reporting period in prior calendar year,
- limited to tax liability for reporting period, the credit equals..
| YEAR | CREDIT | CONSIDERATIONS |
| 2020 | 25% | Of wages paid for quarterly reporting periods |
| 2021 | 21% | Same |
| 2022 | 17% | Same |
| 2023 | 13% | Same |
| 2024 | 9% | Same |
| 2025 | 5% | Same |
| 2026 | 5% | For employers with >5 employees |
| 2027 | 5% | For employers with no more than 5 employees |
Penalties for Employers
The new law also increases penalties on employers for violating these new wage requirements, including:
- $100 per affected employee for failure to keep payroll records
- Civil damage penalties on employers that fail to pay minimum wage (Treble Damages)
- $1,500 fine for willful disregard of wage requirements
If you have questions on the new Minimum Wage Law, our team is ready and willing to help. Contact us today.
