On February 19, 2019, Illinois became the fifth state to implement a $15-per-hour minimum wage increase when Governor J.B. Pritzker signed the Lifting Up Illinois Working Families Act, which was passed by the Illinois legislature on February 14, 2019. The law amends Illinois Minimum Wage Act and Income Tax Act and provides for yearly increases in the statewide minimum wage to reach $15.00 per hour by 2025.
Minimum wage in Illinois will increase from $8.25 to $9.25 per hour on January 1, 2020, and to $10.00 per hour on July 1, 2020. It then increases on January 1 of each year by $1.00 per hour until reaching $15.00 per hour on January 1, 2025. The law sets a lower minimum wage for workers under the age of 18 who work fewer than 650 hours per year. The current minimum wage for such employees, $7.75 per hour, will increase to $8.00 per hour on January 1, 2020 and increase to $13.00 per hour by 2025.
The amendments to the Minimum Wage Act do not change the way gratuities are applied to tipped workers wages. The amendments to the state Income Tax Act also provide a tax credit to small businesses those with 50 or fewer employees by permitting them to claim a tax credit for 25 percent of the difference between employees prior wages and increased wages each year. The credit will be reduced by 4 percent each year until 2026 when it is phased out.
The law also provides for increased penalties to employers who fail to pay their workers minimum wage. Employers will be liable to underpaid employees for triple the amount of unpaid wages and five percent interest for every month wages are unpaid. For willful or repeated violations, or violations occurring with reckless disregard of the Act, employers face a penalty of $1,500.00 payable to the Illinois Department of Labor.
Illinois joins Massachusetts, New Jersey, New York and California as states that have approved gradual increases in minimum wage to $15.00 per hour. Massachusetts minimum wage will reach the $15-per-hour level in 2023, New Jersey in 2024, and California in 2022. New Yorks minimum wage raises are tied to inflation.
The St. Louis employment attorneys at McMahon Berger have been representing employers across the country for over sixty years and are available to discuss issues related to wage and hour compliance and other matters. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.