In February, Governor JB Pritzker signed a piece of legislation that will set Illinois on track to reach a statewide minimum wage of $15.00 by 2025. To mitigate the effect this change has on small employers, the law allows employers with 50 or fewer employees to claim a tax credit for 25% of the cost of the increase in 2020 and gradually phases out over the next several years.
The following chart shows the dates each incremental increase will occur and the corresponding statewide minimum wage.
| Date | Minimum Wage |
| January 1, 2020 | $9.25 |
| July 1, 2020 | $10.00 |
| January 1, 2021 | $11.00 |
| January 1, 2022 | $12.00 |
| January 1, 2023 | $13.00 |
| January 1, 2024 | $14.00 |
| January 1, 2025 | $15.00 |
In addition to raising the minimum wage, the new law imposes harsher penalties on employers who fail to pay their employees minimum wage. Previously, employers were liable for the amount of any underpayment plus a statutory penalty of 2% of the underpayment per month that amount goes unpaid (effectively, interest) and employers could be fined up to 20% of the underpayment. The new law more than doubles the statutory penalty to 5% per month, allows employees to recover three times the amount of the underpayment, and allows for a fine of up to $1,500 per violation in addition to the pre-existing 20% fine.
Employers can also now be fined for their failure to keep the records required by the Illinois Wage Payment and Collection Act, up to $100 for each affected employee. The Illinois Wage Payment and Collection Act states that an employer must keep, for a period of not less than three years, true and accurate records of: (1) the name and address of each employee; (2) the hours worked each day in each work week by each employee; (3) the rate of pay; (4) the amount paid each pay period to each employee; and (5) all deductions made from wages.
Finally, in addition to these statewide changes it is important to remember that Chicago and the broader Cook County area will also increase minimum wages effective July 1, 2019. The minimum wage will increase from $12 to $13 per hour in Chicago and from $11 to $12 per hour in Cook County. These changes will necessarily affect the maximum tip credit that some employers may be able to take.
If you have any questions about any of these newly effective laws, please contact Marcus & Boxerman at (312) 216-2720 or firm@marcusboxerman.com.
Chicago City Council have enacted or modified several laws and ordinances that affect employers. Sifting through the specific legal language can be tricky, so we’ve summarized the most important changes that are relevant to employers.
In a prior blog post, we advised employers about a once little-known Illinois law, the Biometric Information Privacy Act (BIPA). The BIPA imposes numerous restrictions on how private entities collect, retain, disclose, and destroy biometric identifiers such as fingerprints, voiceprints, retina or iris scans, and scans of hand or face geometry. Businesses most often collect this information from employees, but advances in technology have caused a recent increase in the collection of consumers’ biometric information.
The Department of Labor (DOL) has proposed changes to the Fair Labor Standards Act’s (FLSA) tip pooling regulations. The proposed changes would roll back the Obama administration’s 2011 regulations that prohibited employers from distributing tips to anyone other than front-of-the-house staff who earned them. Following the 2011 Obama administration regulations, the DOL has maintained that tips earned by front-of-the-house employees–including servers, bartenders, and bussers–are the property of the employees, and that employers may not mandate that they be shared with back-of-the-house employees such as cooks and dishwashers. The current rules also allow for a “tip credit,” whereby employers can pay tipped employees less than the federal minimum wage, as long as tips make up the difference.
The National Labor Relations Board (NLRB) is scrutinizing employee handbooks that violate the National Labor Relations Act (NLRA), the law that protects an employees’ collective bargaining and organizing rights. The NLRB looks for workplace rules that restrict—or could be construed to restrict—employees’ right to engage with each other, to organize (including forming, joining or assisting labor unions) and to take other collective action. The language employers use in their employee handbooks is key, because provisions meant to protect the employer may violate the NLRA. The NLRB recommends employers use detailed wording, sufficient context and clarifying examples to prevent misinterpretation.
In a nearly unanimous vote by the Cook County Board on October 11th, the Cook County sweetened beverage tax has been repealed. Passed in early August 2017, the controversial tax was only in effect for two months before lawmakers decided to retire it. Proponents of the tax reasoned the tax is an effective way to fight obesity and other related health conditions, while also generating income for the county. Opponents of the tax argued that it damaged small businesses and led to plummeting store sales, as customers simply went across county lines to purchase beverages subject to the tax. Large corporations including PepsiCo and Coca-Cola spent millions of dollars fighting the tax. Lawmakers now have until the end of November to adjust the Cook County budget to account for the $200 million of revenue the County estimates the tax would have brought in. The repeal goes into effect December 1, 2017.
A once little-known law, the Illinois Biometric Information Privacy Act (“BIPA”), is now the subject of class actions by employees alleging that employers have misused their biometric information. This client update should help employers avoid unknowing violations of the BIPA and the significant risk of an employee class action lawsuit.
The Cook County Board of Commissioners recently passed the Earned Sick Leave Ordinance, requiring employers to provide paid sick leave to eligible employees. The Ordinance goes into effect July 1, 2017.