With significant developments in Illinois labor and employment laws over the past year, employers are now required to adjust their policies to ensure continued legal compliance. Illinois has limited the use of criminal convictions in hiring, mandated the release of employers’ demographic information and allowed employees to request EEO salary data from their employer. The state has also created new criteria for restrictive covenants, clarified issues related to damages under the Biometric Information Privacy Act, required the availability of paid leave for all employees and expanded the use of unpaid bereavement leave. The City of Chicago also has increased employee protections and updated sexual harassment laws to encourage employees to report incidents while placing more onus on employers to prevent harassment.

While employer obligations have significantly increased in some areas, the new regulations are easily navigable with proper preparation. Understanding the law is the first step to employer compliance and that’s why the Chicago Labor and Employment team at Fox Rothschild has prepared this series of alerts to bring employers up to speed:

• Minimum Wage. Effective July 1, 2023, the minimum wage was increased in Chicago and Cook County. Employers must post updated posters and confer with payroll companies to adjust applicable employee’s hourly pay.
• Mandated Training and Pay Practice Review. Illinois is requiring employers to take action for equitable employment. All employers — even with only one employee — must train human resources personnel and review pay practices to align with the requirements. The State of Illinois has started to require information from employers and those that do not comply face hefty fines.
• Restrictive Covenants. There are new restrictions on restrictive covenants. Failing to comply runs the risk that agreements will not be enforceable. Moreover, an agreement that imposes a non-compete clause or a non-solicitation clause on certain types of employees can lead to costly lawsuits.
• Privacy Policies. Employers should review privacy policies to prevent lawsuits under the Biometric Information Privacy Act. Failure to update privacy policies leaves employers open for substantial judgments given the harsh BIPA statutory penalties.
• Leave Policies. Illinois has expanded paid and unpaid leave time requirements, mandating that employers review and update leave policies immediately. Importantly, employers also must review scheduling policies to ensure compliance with notice requirements.
• Sexual Harassment. Chicago has tightened sexual harassment laws and it is critical that new posters be posted and information be provided to employees. Employees may need an updated sexual harassment training before the calendar year ends for employers to remain in compliance.

Chapter 1: Chicago and Cook County Hike the Minimum Wage for All Employees

Illinois’ $13 per hour minimum wage is lower than the minimum wage in Chicago.

Chicago has increased its minimum wage each year since July 1, 2015. Through June 30, 2023, Chicago’s minimum wage was $15.40 per hour for employers with more than 20 employees and $14.50 per hour for employers with 4 to 20 employees. The minimum wage increased to $15.80 per hour and $15.00 per hour, respectively, on July 1, 2023. The minimum wage for tipped employees also increased to $9.48 per hour and $9.00 per hour, respectively. Employers must make up the difference for tipped employees if their tips do not equal $15.00 per hour. The minimum wage for youth workers was $12.00 per hour and increased to $13.50 per hour on July 1, 2023. The amounts for tipped youth workers also increased depending upon the size of the employer.

Importantly, the minimum wage for domestic workers, such as housekeepers and caregivers, matches the minimum wage requirement for large employers, so it now is $15.80 in Chicago. Moreover, the Chicago Fair Workweek Ordinance, which applies to employees in the building services, health care, hotel, manufacturing, restaurant, retail or warehouse services industries serving an employer with at least 100 employees globally or 250 employees and 30 locations for restaurants, updated compensation metrics on July 1, 2023.

The Cook County minimum wage for non-tipped workers remains at $13.35 per hour. However, effective July 1, 2023, the Cook County minimum wage for tipped employees increased to $7.80 per hour to comply with Illinois law.

Illinois is scheduled to increase the minimum wage to $15 per hour effective January 1, 2025.

Recommended Next Steps

Every employer must review their minimum wage compliance, paying particular attention to the increases under the Chicago and Cook County ordinances. Employers must properly pay employees working in these jurisdictions.

Employers in the city and county must:(1) provide employees with notice of the new pay requirements; (2) post updated notices provided by the Chicago Office of Labor Standards; and (3) confirm with payroll companies that any mandated increases have been implemented so they are reflected in the next pay period.

Next Up: Illinois Employers Must Act for Equitable Employment

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