[co-author: Tracey Oakes O'Brien]
On February 14, 2019, the Illinois House voted to complete the passage of legislation that increased the minimum wage paid to Illinois employees to $15.00/hour over a 6-year period. Consistent with his campaign promise, Governor J. B. Pritzker is expected to sign the bill this week making Illinois the fifth state to establish a $15.00 minimum wage by 2025.
Under the legislation, the current minimum wage of $8.25/hour will increase by $1.00 to $9.25/hour on January 1, 2020. On July 7, 2020, an increase of .75 cents will raise the minimum wage to $10.00/hour, and on January 1 of each subsequent year, the minimum wage will increase by $1.00 until it reaches the maximum of $15.00/hour on January 1, 2025.
The legislation contains provisions that lower wage costs and assist employers with the increase in costs resulting from the minimum wage hike including:
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An allowance not exceeding 40% of the applicable minimum wage rate for gratuities provided to employers of tipped workers.
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Lower minimum wages paid to employees younger than 18 years and working less than 650 hours a year beginning at 8.00/hour as of January 1, 2020, and increasing each year to a maximum of $13.00/hour as of January 1, 2025.
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A tax credit of 25% of the amount withheld to offset the cost of the minimum wage increase to employers with 50 or fewer employees. The tax credit will be phased out over a period of years providing a longer phase-out period for employers with five or fewer employees.
Chicago and Cook County presently provide minimum wage rates at $12.00 and $11.00/hour, respectively. As of July 1, 2019, Chicago will increase its minimum wage rate to $13.00/hour and Cook County will increase it to $12.00/hour.
