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.

DATEHOURLY 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:

DATEHOURLY 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..
YEARCREDITCONSIDERATIONS
202025%Of wages paid for quarterly reporting periods
202121%Same
202217%Same
202313%Same
20249%Same
20255%Same
20265%For employers with >5 employees
20275%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.