Minimum Wage Laws

2021-01-02T20:41:38+00:00By |

Minimum Wage Law

Minimum Wage LawsFederal 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

Effective January 1, 2020 the Illinois Minimum Wage is $9.25 per hour. The Illinois minimum wage will increase as follows:

Year Minimum Wage Tipped Wage Youth Wage
1/1/20 $9.25 $5.55 $8
7/1/20 $10 $6 $8
1/1/21 $11 $6.60 $8.50
1/1/22 $12 $7.20 $9.25
1/1/23 $13 $7.80 $10.50
1/1/24 $14 $8.40 $12
1/1/25 $15 $9 $13

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.

As of July 1, 2020 the minimum wage in Chicago is $13.50 per hour for employers with 4 to 20 workers, and $14 per hour for employers with 21 or more workers. Tipped workers (workers who receive tips as part of their wage, like restaurant servers) have a minimum wage of $8.10 for employers with 4 to 20 workers, and $8.40 for employers with 21 or more workers. If a tipped worker’s wages plus tips do not equal at least the full minimum wage, the employer must make up the difference. The minimum wage for City of Chicago contracts or concessionaire agreements is $14.15 per hour, or $7.65 per hour for tipped workers.

With several exceptions, if you work in Illinois or the City of Chicago, this means an employee must be paid at least the full applicable minimum wage multiplies by 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 the state or local applicable wage (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 the applicable minimum wage.

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.