Minimum Wage Laws

2020-04-25T19:37:04+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

On December 2nd, 2014, the Chicago City Council passed an ordinance raising the minimum wage for Chicago workers. The City of Chicago ordinance raises the hourly minimum wage to $10 in 2015, $10.50 in 2016, $11 in 2017, $12 in 2018, and $13 in 2019, indexed annually to the Consumer Price Index (CPI) after 2019. The ordinance also increases the minimum wage for tipped employees in from the current state minimum of $4.95 to $5.45 in 2015 and $5.95 in 2016, indexed annually to the CPI after 2016. 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 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.