NEW LAW: Illinois To Incrementally Increase Minimum Wage to $15.00 Per Hour

On February 19, 2019, Illinois Democratic Governor, JB Pritzker, signed the Lifting Up Illinois Working Families Act  (Public Act 101-0001) into law –making New Jersey the latest state to jump on the $15 per hour minimum wage bandwagon.

Under this new law, Illinois’ minimum wage will increase as follows:

  • January 1, 2020 — increases to $9.25 per hour
  • July 1, 2010 — increases to $10.00 per hour
  • January 1, 2021 — increases to $11.00 per hour
  • January 1, 2022 — increases to $12.00 per hour
  • January 1, 2023 — increases to $13.00 per hour
  • January 1, 2024 — increases to $14.00 per hour
  • January 1, 2025 — increases to $15.00 per hour

The minimum wage rate for tipped employees  will also increase as follows:

  • January 1, 2020 — increases to $5.55 per hour
  • July 1, 2020 — increases to $6.00 per hour
  • January 1, 2021 — increases to $6.60 per hour
  • January 1, 2022 — increases to $7.20 per hour
  • January 1, 2023 — increases to $7.80 per hour
  • January 1, 2024 — increases to $8.40 per hour
  • January 1, 2025 — increases to $9.00 per hour

The new law, does, however, provide a small silver lining for small businesses.  The law allows employers with 50 or fewer employees claim a tax credit on the difference between an employee’s wage in the prior year and the increased wage each January 1. That credit, is reduced by 4% each year until it is completely eliminated in 2026 for employers with six or more employees (2027 for employers with five employees or fewer).

It is recommended that all Illinois employers prepare for these increases.