Chicago’s minimum wage is already the highest in the state and due to increase on July 1, 2019. Employers need to be ready for not only the overall increase in minimum wage, but also the commensurate increase in employee expectations and overtime that will go along with the Chicago minimum wage increase.
The 2019 Chicago Worker Minimum Wage Increase will be Greater than 9%
For the majority of Illinois, the minimum wage is$8.25 for employees ages 18 and over, and $7.75 for employees 17 and under, while the federal minimum wage is $7.75.
In Cook County, which geographically includes Chicago as well as the near suburbs, the minimum wage for employees working in non-Chicago companies, is $11.00 an hour and the minimum wage for workers in Chicago is $12.00.
Starting July 1, 2019, the minimum wage for Chicago workers will increase to $13.00 per hour. That is greater than a 9% increase in minimum wage.
How can Chicago Employers Plan for the Chicago Minimum Wage Increase?
Employers need to start planning now for how this will affect the pay scale for hourly employees, especially those making a lower hourly income. Employees who began at minimum wage or slightly higher and received merit increases in their hourly wages will have the expectation that their salary will increase as well.
Employers also need to plan for how this pay increase will affect overtime. An increase in the hourly wage will mean an increase in overtime wages.Even though the minimum wage exceeds federal standards, the federal lawmandates that employees receive overtime in an amount that is 1.5 times the employee’s regular rate. This means that the overtime rate for a minimum wage employee in Chicago will increase from $18.00 to $19.50 an hour.
Employers also need to verify that their non-exempt salaried employees are paid a high enough salary to meet or exceed the minimum wage increase. For a non-exempt salaried employee in Chicago, the employee’s current salary must be $24,960.00 before overtime. Starting July 1, 2019, the salary must be $27,040.00 before overtime.
How Will Our Change in Governor Affect Statewide Minimum Wages?
During his campaign, the now sitting Governor Pritzker promised to raise the Illinois Minimum Wage from $8.25 to $15.00. He reaffirmed that desire to raise the Illinois Minimum Wage during his inaugural speech wherein he stated:
“Working men and women deserve to have a governor and a Department of Labor that will enforce laws protecting workers’ wages and workers’ rights. And they deserve a $15 minimum wage. It’s good for the working families of Illinois and good for our economy.”
Illinois employers should be prepared for changes in Illinois’ minimum wage.
McKenna Storer attorneys have extensive experience in defending employers in wage and hour matters. Contact Kristin Tauras for information about the Chicago minimum wage increase or any other wage related questions.