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.