Illinois and Chicago Employment Law Update: Minimum Wage, Paid Sick Leave and Employee Retirement Accounts

punch-clockThree important employment law changes in the City of Chicago and the State of Illinois may affect your business.

Chicago Minimum Wage Ordinance

On July 1, 2016, the City of Chicago’s minimum wage increased by 50 cents per hour, to $10.50 for non-tipped employees and $5.95 for tipped employees as part of the Chicago minimum wage ordinance approved in late 2014.  The Chicago minimum wage will increase to $13 by 2019.

Employers that either maintain a business facility in the City of Chicago or are subject to at least one Chicago license requirement are bound by the ordinance and must pay all covered employees over the age of 18 the higher minimum wage after the first 90 days of employment.

Employers must post notice of the increase to all employees and must also provide notice of the increase with each employee’s first paycheck received after the effective date of the increase.  The notice can be found here.

Chicago Paid Sick Leave Ordinance

In June, the Chicago City Council passed an ordinance requiring employers to provide paid sick leave.  The ordinance goes into effect July 1, 2017.

Under the ordinance, employees earn 1 hour of sick leave for every 40 hours worked, for a maximum of 40 hours per year.  A total of 20 unused sick hours can roll over into the following year, but there is no payout for unused sick days.  Accrual periods begin after an employee works 80 hours within a 120-day period.  Employees can start using their paid sick leave hours after a 180-day probationary period. Sick leave is available, for example, when an employee or one of his or her family members is ill, injured or receiving medical care, or if the employee is the victim of domestic abuse or sexual violence.

Individuals and business entities with at least one covered employee that maintain a business facility within the City of Chicago or are subject to at least one Chicago license requirement are bound by the sick leave ordinance.  Employers with paid time-off policies that already meet the ordinance’s requirements are exempt from this new ordinance.

Illinois Secure Choice Savings Program

Beginning July 1, 2017, Illinois will implement the Illinois Secure Choice Savings Program.
Under Secure Choice, employees may contribute to a Roth individual retirement plan through paycheck deductions.  Employees are automatically enrolled in Secure Choice but may choose to opt out.  Employers are required to facilitate contributions through the payroll process but are not required to make contributions to accounts or make any investment decisions.

Businesses with at least 25 employees and in operation for at least two years that do not currently offer a retirement plan must participate in the program.  Businesses in operation for less than two years or with fewer than 25 employees may choose to voluntarily participate.  Businesses with existing retirement plans cannot participate.  Employers have nine months from program inception to ensure their employees are enrolled or opted out.

If you have any questions about these changes, please contact Marcus & Boxerman at 312.216.2720 or

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