Minimum Wage Law
Federal and state law requires employers pay certain employees the minimum wage for all time they work in individual work weeks. Many states and cities, including Illinois and the City of Chicago, have minimum wage rates that are higher than the federal minimum wage.
Illinois Minimum Wage Law
The current Illinois Minimum Wage is $8.25 per hour. The current minimum wage in the City of Chicago is $11.00 per hour. The current federal minimum wage is $7.25 per hour. In states or cities where the minimum wage is higher than the federal minimum wage, employers are required to pay employees the higher of the city, state or federal minimum wage.
With several exceptions, if you work in Illinois, this means an employee must be paid at least $330 for 40 hours of work, regardless if you are paid on an hourly or salary basis. Thus, unless an employee is exempt from the minimum wage, like an outside sales person, it is illegal for an employer to pay an employee less than $8.25 per hour (and $7.25 under federal law), regardless of how the employee is paid. Many employers try and avoid their minimum wage obligations by paying employees on a commission, flat rate or piece rate basis. Some employers fail to pay minimum wages by paying employees a “salary” by requiring the employee to work so many hours, that their effective hourly wage rate is less than $8.25 per hour.
Some employers may be exempt from paying the minimum wage under certain instances. For example, employers may use the value of lodging or meals as a credit towards the minimum wage, as long as they meet certain criteria. Certain employers may apply a tip credit against the minimum wage paid to tipped employees, assuming all the criteria for taking the tip credit are satisfied. Tipped employees are among the kind of employee who most frequently are not paid all their earned minimum wages in violation of state and federal law.