The Minimum Wage Increase in Illinois Could Cost Employers 382,200 Jobs
As Illinoisans ring in 2024, the state’s minimum wage will increase to $14 per hour. The minimum wage for tipped workers will also increase to $8.40.
Corporate profits have soared at disproportionately higher rates than wages and productivity. This disconnect is harmful to the economy.
However, studies have shown that raising the minimum wage can help to close this gap.
1. What is the minimum wage?
The minimum wage is the lowest hourly rate that employers are allowed to pay their employees. It is set by federal, state, and local laws.
In Illinois, the minimum wage is currently $8 per hour for non-tipped workers and $7 for tipped workers. It is scheduled to increase to $15 for non-tipped workers and $9 for tipped workers on Jan. 1, 2024.
Employers must also pay overtime if an employee works more than 40 hours in a week. Overtime is paid at a rate of time and a half of the employee’s regular pay rate.
Cook County’s Minimum Wage Ordinance (MWO) requires all employers located within or doing business in the County to pay at least the County minimum wage. However, some suburban cities, townships, and villages have passed their own minimum wages and do not follow the County MWO.
2. Is lunch time required by labor laws?
Under Illinois law, employees must be provided with a 20-minute meal break if they work seven and a half hours in a shift. This meal break must start no later than five hours after the beginning of the shift. There are exceptions to this rule, such as for hotel room attendants.
Employers must also provide a 30-minute lunch break for employees working shifts of six or more hours. This break must be provided between 11:00 a.m. and 2:00 p.m. In some cases, small employers can show that it is impossible or impractical to provide a 30-minute meal break for their employees.
In addition to meal and rest breaks, workers must be paid at least the minimum wage for each hour that they work. Employees can file a complaint with the state Labor Department if their employer fails to comply with these laws. Moreover, employers can also face fines if they do not pay their employees the proper wage rate.
3. How can employers better meet the rising minimum wage standard?
As an employer in Illinois, ensuring that your employees are paid the proper wages is crucial. This includes understanding and complying with labor laws such as the minimum wage, overtime pay, wage deductions, and more. Having an in-depth understanding of these rules and following best practices can help you foster a compliant workplace, maintain a strong reputation for ethical labor practices, and minimize your risk of legal disputes.
On January 1, 2024, the Illinois hourly minimum wage will increase to $14 per hour for non-tipped workers. In Chicago, a schedule of gradual increases will bring tipped workers to a uniform minimum wage of $9 per hour by 2028. Youth workers will continue to be paid a minimum wage of $12 per hour.
Workers who would benefit from the minimum wage increase are primarily adults whose families rely on their income to pay the bills. In fact, a study conducted by EPI and Voices for Illinois Children found that one-third of minimum wage earners are sole breadwinners for their families.
4. What are the consequences of the minimum wage increase?
Increasing labor costs have many consequences, including the possibility of cutting jobs and raising prices. In fact, a study by the American Action Forum found that the proposed minimum wage increase in Illinois could cost 382,200 jobs.
The new law includes a tax credit that will help businesses with their higher labor costs, but it will only be available for small businesses and the amount of the credit will decline over time until it reaches zero in 2025. It is important to remember that the majority of workers earning the minimum wage in Illinois work for large employers and will not be eligible for this tax credit.
In addition to the minimum wage increase, there are a number of other changes taking effect as we enter the new year. It is essential for employers to review all wage rates and make sure they are in compliance with state and federal laws. It is also recommended that employers seek legal counsel to review existing wage schedules and contracts with unions.