What to Know About the Illinois Minimum Wage Increase

stlegalgroup • April 26, 2021

There’s no doubt that living in the U.S. is expensive. As seen clearly in the wake of the coronavirus pandemic, many Americans are struggling to make ends meet. This is especially true for those hourly workers who have been paid minimum wage. In an effort to help with inflation and the rising cost of living, the state of Illinois has new laws that will take effect this year and will impact both employers and employees.

For starters, the state’s minimum wage will increase to $11 per hour for standard workers, with a goal to eventually rise to $15 per hour come 2025. (The minimum wage for tipped workers will increase to $6.60, while the same for workers under the age of 18 who work fewer than 650 hours in a calendar year will be $8.50.)

While this may sound good for employees, many employers aren’t quite so happy with the idea. In light of the pandemic and the difficulty it has caused within the retail industry – with many businesses struggling to stay in business – retailers have expressed that they won’t be able to afford these changes.

Increases Throughout the State

The new minimum wage increase will eventually affect all of Illinois, but not all at once. Different parts of the state will be increasing to the new minimum wage at different times throughout the year. The minimum wage in Chicago will increase to $15 per hour on July 1, 2021, and $14.50 per hour for those employed at companies with no more than 20 employees. Additionally, tipped workers will see an increase to $9.00 per hour, while tipped employees must be making at least $15.00 per hour in base wage plus tips. If their tips don’t bring their total pay to $15.00 per hour, it will fall on the employer to pay the difference.

Penalties for Wage Violations

For business owners, no matter the size of the business, it’s important to understand what can happen to them should they violate these new hourly minimums in Illinois.

Every employer is required to understand the minimum wage laws and must place a copy of the Fair Labor Standards Act provisions somewhere at work where employees will be able to easily read it. Additionally, if an employer doesn’t may its worker at least the required federal minimum wage, or if it doesn’t comply with guidelines for overtime pay, the employer could find itself in court having to pay hefty penalties.