Illinois has various laws governing the payment of employees, including minimum wage and overtime laws. Employers within the state must abide by these laws or risk facing significant penalties. Four of the most important Illinois wage and overtime laws include those described here.
1. Illinois Minimum Wage Law
Under Illinois law, the minimum wage for workers aged 18 and over is $11.00 per hour as of January 2021. If they’re tipped employees, you only have to pay 60% of that ($6.60 per hour), but only if you apply a tip credit for up to 40% of the current minimum wage.
In the coming years, those rates will continue to increase. With the passing of Public Act 101-0001 in 2019, the minimum wage in the state will increase by a dollar each year until it reaches $15.00 per hour in 2025. As such, Illinois businesses will need to account for increased costs in wages among their workforce.
2. Illinois Overtime Law
Illinois requires payment at time-and-a-half for work that goes beyond 40 hours per workweek. Overtime pay is not required for working Sundays or legal holidays unless working those days puts employees over 40 hours for the week.
A few exceptions exist with respect to this law, including:
- Mechanics or salesmen who service/sell cars, trucks, or farm implements
- Executive, administrative, or professional employees as defined by the FLSA
- Agricultural labor
- Commissioned employees as defined by the FLSA
- Workers in certain educational or residential childcare institutions
- Certain radio/television employees in cities with populations under 100,000
- Employees under a workplace exchange agreement
Note also that “comp time” is illegal under Illinois law.
3. Illinois Prevailing Wage Act
If you’re a contractor or subcontractor performing work that is funded to any degree by a public entity operating under the state, then you must conform to the Illinois Prevailing Wage Act. This act requires contractors working on publicly-funded jobs to pay their workers based on the prevailing wages in their area for similar work.
Public works projects are defined as any job that is funded by the state or any of its political subdivisions, and they include projects paid for through grants, loans, bonds, or other state funds.
Prevailing wages by county can be found here. Keep in mind that the rates are often much higher than minimum wage, so plan accordingly.
4. Illinois Wage Payment and Collection Act
The Wage Payment and Collection Act defines where and when wages must be paid and prohibits deductions. Typically, employees must be paid at least twice per month and no later than 13 days after the end of a pay period. Executive, administrative, or professional employees as defined under the FLSA must be paid at least monthly.
An employer may only reduce pay rates if they notify their employees of the change prior to the work being performed.
Maintaining Compliance with Illinois Wage Laws
These laws have many complex components, which means you must be thorough when maintaining compliance. It can be easy to miss key aspects governing niche cases, which is why the guidance of an attorney is central to ensuring complete regulatory compliance in your employment-related processes. To maintain compliance with Illinois wage laws, contact an attorney today.