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Illinois Legislature Fast-Tracks Minimum Wage

Certainly the beginning of the Legislative Session in the State of Illinois during calendar 2019 is attempting to move quickly on the campaign promises of J.B. Pritzker. As everyone will recall, the recently elected Governor's campaign pledge to increase the state's minimum wage has been fast-tracked with the passing, by the Illinois Senate of the "Lifting Up Illinois Working Family's Act" and sending the bill to the State House of Representatives. The Illinois House of Representatives passed the bill on Valentine's Day, February 14, 2019, by a vote of 69-47-1. The bill was signed with extensive media coverage by Governor Pritzker on February 19, 2019.

Under the bill, the hourly minimum wage would be increased to $9.25 per hour as of January 1, 2020; $10.00 per hour as of July 1, 2020; $11.00 an hour as of January 1, 2021 and an additional $1.00 per hour each January 1st thereafter until reaching $15.00 an hour effective January 1, 2025. The bill will permit employers to play a slightly lower wage rate to employees under the age of 18 provided that those employees work less than 650 hours per year that would "top out" at $13.00, and allow employers to pay tipped employees sixty (60%) percent of the minimum wage if tips made up the remaining forty (40%) percent of the required Minimum Wage. As well, to have a tax credit for employers that employ less than Fifty (50) full-time equivalent employees.

In addition to increasing the Minimum Wage, the law would impose additional remedies for employees who are not paid the correct minimum wage. Employees would now be able to recover triple the amount of any underpayment and reasonable attorneys' fees and costs As well, an additional payment effectively interest of 5% of the amount of underpayment for each month would be tacked on as additional damages. Employers would also have to pay a statutory penalty of $1,500 to the Illinois Department of Labor Wage Theft Enforcement Fund and would have imposed on them a $100 fine/penalty for each affected employee if an employer fails to maintain proper payroll records.

If this bill becomes law (i.e. is signed by Governor Pritzker) Illinois would become the third (3rd) largest state (i.e. "based on employment statistics," behind California and New York) to pass a $15.00 per hour minimum wage bill. As an aside, there are two (2) localities within the State of Illinois which have previously passed Minimum Wage Ordinances that are higher than the proposed state rate. Chicago currently at $12.00 per hour and going to $13.00 in July 1, 2019 and Cook County currently at $11.00 per hour and going to $12.00 per hour on July 1, 2019. These rates, which would be higher than the State of Illinois Minimum Wage Rate, would control until those rates were exceeded by the State of Illinois Minimum Wage.

Obviously, the "cost of doing business" in the State of Illinois is increasing and the affect, if any, on business growth within Illinois is subject to question.

Questions? Contact Attorney Walter Liszka in our Chicago office at (312) 629-9300 or by email at [email protected].

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