Illinois Minimum Wage Set to Rise to $15.00/Hour
The Illinois Legislature has passed a bill to raise the minimum wage in Illinois from its current level of $7.25 per hour to $15.00 per hour. The Bill is currently sitting on Governor Pritzker’s desk and he has indicated he is inclined to sign it into law.
The new law, entitled “Lifting Up Illinois Working Families Act” will gradually increase the minimum wage in Illinois to $15.00 per hour over a period of six (6) years.
Under the new law, the hourly minimum wage will rise as follows:
- $9.25 on January 1, 2020;
- $10.00 on July 1, 2020;
- $11.00 on January 1, 2021;
- $12.00 on January 1, 2022;
- $13.00 on January 1, 2023;
- $14.00 on January 1, 2024; and
- $15.00 on January 1, 2025
The new law will provide that employers may pay a slightly lower rate of pay to employees under the are of 18, provided they work less than 650 hours a year. There is also a tax credit to those employers with less than 50 full-time equivalent employees.
Aside from raising the minimum wage, the new law will increase the remedies available to employees who are paid less than the minimum wage. Employees will now be able to recover triple the amount of the underpayment; reasonable attorney’s fees and costs; and an additional payment (effectively interest) of 5% of the underpayment for each month it remains unpaid. This is a dramatic increase in penalties and remedies which are currently in place for employees who are denied minimum wage in Illinois. In addition, an employer that violates the minimum wage provisions will have to pay a statutory penalty of $1,500 to the Illinois Department of Wage Theft Enforcement Fund, as well as a penalty of $100 per affected employee if it fails to maintain proper payroll records.
If Governor Pritzker does sign the Bill into law as expected, the impact will be immediate and possibly severe on businesses and consumers as well. Opponents of the measure note that such a move is likely to lead to a decrease in the workforce as companies shift to a more automated way to deliver goods and services. Fast food companies are beginning to roll out self serve kiosks to replace human order takers. Grocery stores are also experimenting with cashierless check out. In all likelihood, employers will be forced to pass on the increased wage cost to consumers in the form of higher priced goods and services.
Proponents of the new Bill note that it is virtually impossible to sustain a standard of living while being paid $7.25 per hour. They also note that the increase in minimum wage will have a positive tax revenue impact by raising the taxable wages of workers subject to Illinois Sate (and possibly Federal) income tax.
The new minimum wage is an important step in achieving a living wage. However, employers need to be aware of the penalties for non-compliance with the law, which are dramatically different and much more costly for each violation.
As always, where there are important legislative developments impacting the labor and employment world, we will keep you up to date. This is an area of concern for all in the labor and employment area.
With over 34 years’ experience in advising employers and employees on workplace issues, let Boznos Law work with you to ensure you are ready to meet the challenges posed by the changes to the employment laws. Call Bill Boznos today at (630) 375-1958 or contact us at www.boznoslawoffice.com/contact-us through our website.