Illinois employers face another round of wage adjustments this year as the state continues its commitment to higher worker compensation. These changes require businesses to adapt quickly or risk costly penalties.
In this guide, we’re breaking down what Illinois businesses need to know about the changing minimum wage rules. Failing to follow these requirements could lead to hefty fines and legal troubles for unprepared employers.
Key Takeaways
- Illinois minimum wage reached $15.00 per hour in 2025, placing it significantly higher than the federal minimum wage rate of $7.25 per hour
- Different worker categories, including tipped employees and youth workers, have specific minimum wage provisions under Illinois law
- Employers must follow both state minimum wage requirements and any applicable local ordinances that may set higher rates in certain municipalities
Key Changes in Illinois Minimum Wage Laws for 2025
Illinois maintains a comprehensive labor law structure designed to protect workers’ rights, while also providing a straightforward framework for employers to follow. As of January 2025, this structure establishes the following minimum wage rates:
- A standard $15.00 per hour for workers 18 and older
- $9.00 per hour for tipped workers, although a tip credit system ensures a total pay of at least the standard minimum wage rate
- $13.00 per hour for young workers under 18 who meet certain criteria
- New hire minimum wage rates up to 50 cents less per hour during their first 90 days, often referred to as a training wage
The minimum wage increases apply to businesses with four or more employees. Smaller operations are exempt from these requirements, providing some flexibility for micro-businesses.
However, overtime pay requirements are not tied to the same employee threshold. Instead, overtime must be paid after 40 hours of work per week at 1.5 times the regular rate. As regulated by the Fair Labor Standards Act, this overtime rule applies to most employees, regardless of the size of the business.
Finally, some localities still maintain higher wage requirements than the state minimum. Chicago leads in this area at $16.20 hourly for businesses with four or more employees. Although Cook County now aligns with the state’s $15.00 rate, it still has its own minimum wage ordinance that applies to specific employees within the county.
Illinois Minimum Wage Rates for Worker Categories
Looking closer at those minimum wage basics, Illinois maintains different minimum wage rates based on worker classifications, from standard workers to tipped employees and youth workers. Each category follows specific wage requirements set by Illinois labor laws.
Standard Minimum Wage for Workers 18 And Older
The Illinois standard minimum wage of $15.00 per hour is the result of the state’s gradual minimum wage increase plan that began in 2019. As of 2025, Illinois joins nine other states with a minimum wage of $15 or greater.
All non-tipped workers must receive at least this hourly minimum wage rate. Employers must comply regardless of company size, though some limited exceptions exist for specific industries.
Tipped Employees Minimum Wage
Tipped employees in Illinois receive a lower base minimum wage of $9.00 per hour as of January 2025. However, when tips are included, these workers must earn at least the full standard minimum wage of $15.00 per hour.
This arrangement operates under a tip credit system. Employers can claim a maximum tip credit of $6.00 per hour—$15.00 - $9.00. However, they must make up any difference if a worker’s tips plus base wage don’t reach the full minimum wage.
By definition, tipped workers include those who regularly receive more than $20 in tips monthly. Common tipped positions include servers, bartenders, delivery drivers, and certain hotel staff.
Employers must maintain detailed records of tips reported and wages paid. They must also inform tipped employees about the tip credit provisions and minimum wage requirements.
Minimum Wage for Youth Workers Under 18
Employers can pay youth workers under 18 years old a reduced minimum wage of $13.00 per hour as of January 2025. This youth wage applies to non-tipped workers who are under 18 and work fewer than 650 hours annually for an employer. For tipped positions, the tipped minimum wage rules take precedence.
The lower rate for youth workers encourages businesses to hire younger, less experienced employees. However, once a youth worker exceeds 650 hours in a calendar year, employers must pay them the full standard minimum wage of $15.00 per hour. Note, the 650-hour limit calculation begins on the date of hire. So, for example, if a youth worker is hired on April 30, 2025, the calculation of hours worked will run until April 30, 2026.
As in most states, youth employment also includes limitations on working hours during school days. Teens aged 14-15 have stricter hour limits than those aged 16-17. But for all workers under 18, employers must maintain accurate records of hours worked to ensure compliance with both wage and hour requirements.
Local Minimum Wage Ordinances in Illinois
Alongside the statewide minimum wage, certain local jurisdictions in Illinois have established their own minimum wage requirements that exceed the state standard. These local ordinances are primarily in the Chicago metropolitan area and affect thousands of workers.
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Chicago Minimum Wage
Chicago implemented its own minimum wage ordinance in 2014, creating a higher wage floor than the state requirement. As of January 2025, Chicago’s minimum wage stands at $16.20 per hour for employers with 4 or more workers.
The city adjusts its minimum wage annually on July 1 at the lower of the Consumer Price Index or 2.5%. The Commissioner of Business Affairs and Consumer Protection announces these increases at least 60 days before taking effect.
Chicago’s ordinance also includes specific provisions for tipped workers, who must receive a base wage of $11.02 per hour. Like the state law, if tips don’t bring their total hourly earnings to the full minimum wage within the city of $16.20, employers must make up the difference. For workers under City contracts or concessionaire agreements, the minimum wage sits at $17.40 per hour in 2025.
Cook County Minimum Wage
Cook County established a minimum wage ordinance in 2016, affecting workers in unincorporated areas and municipalities that haven’t opted out. Currently, the Cook County minimum wage is $15.00 per hour for non-tipped workers, $9.00 per hour for tipped workers. These minimum wage rates align with the statewide rates.
An important feature of the Cook County ordinance is the municipal opt-out provision. More than 100 municipalities within Cook County have exercised their right to opt out of the county’s minimum wage requirements. These opt-outs allow municipalities to retain local control over minimum wage policies and avoid potential future increases and additional provisions specific to Cook County.
Like Chicago, the ordinance provides for annual increases based on inflation, with adjustments occurring each July 1. These increases are announced publicly through the Cook County website and local media outlets.
Illinois Employer Responsibilities and Compliance
Illinois employers must follow specific minimum wage requirements, including accurate payroll records, posting wage notifications, and understanding the consequences of non-compliance with state wage laws.
Payroll Adjustments and Record Keeping
Illinois businesses must update their payroll systems to reflect current minimum wage rates as they increase. Payroll departments should implement these changes before each new rate takes effect to avoid underpayment issues.
Similarly, state law mandates comprehensive record keeping. Employers must maintain detailed records for at least three years, including:
- Employee name, address, and occupation
- Hours worked each day and week
- Regular and overtime wage rates
- Total wages paid each pay period
- Deductions made from wages
Employers must also provide copies of pay stubs to current employees within 21 days of a written request, limited to twice per 12-month period. For former workers, employers must offer pay stub records from the year preceding separation.
Further, small businesses with fewer than 50 employees should document any minimum wage credits they claim. Ideally, to simplify these processes for all businesses, electronic payroll systems should automatically calculate the correct minimum wage based on employee classification.
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Posting Requirements for Minimum Wage Laws
Illinois law requires employers to display official minimum wage notices in prominent locations that are visible to all employees. These posters must be in English, but employers with significant non-English speaking staff should also post translations in the appropriate languages.
The required postings include:
- Current minimum wage rates
- Overtime requirements
- Employee rights under Illinois labor laws
- Contact information for reporting violations
Employers must update these notices whenever there’s a change to minimum wage rates. However, businesses can always download updated posters through the Illinois Department of Labor website free of charge. You can use Mosey to automatically source and publish up-to-date labor notices and posters in every state you have employees with a single, easy to share link. That’s one less thing on your to-do list so you can focus on growing your business.
Companies with multiple locations must display posters at each worksite where they have regularly reporting employees. Also, digital notifications can supplement physical postings but cannot replace them. Note, however, that businesses without a physical business facility can distribute this legal information through the employer’s internal communication channels to satisfy the requirement.
Penalties for Minimum Wage Non-Compliance
Illinois enforces strict penalties for minimum wage violations. Employers who fail to pay proper wages may face both financial and legal consequences. First-time violations typically result in orders to pay back wages plus damages equal to 5% of underpaid wages per month. That calculation goes back to the first date of underpayment, with all damages payable to the employee.
Employers are also subject to administrative fees payable to the Illinois Department of Labor, including:
- $250 for underpayments up to $3,000
- $500 for underpayments between $3,000 and $10,000
- $1,000 for underpayments of $10,000 or more
Repeat offenders face more severe penalties, including:
- Fines ranging from $250 to $10,000 per violation, depending on business size, number of prior violations, and the gravity of the offense
- Additional civil penalties up to $100 per impacted employee for record-keeping violations
- Potential criminal misdemeanor charges
For non-compliant job postings related to pay transparency, penalties also range from $250 to $10,000. First-time offenders are given a 14-day cure period to fix violations before a $500 fine is imposed. For willful, repeated, or reckless violations, employers may be liable for up to 20% of all underpaid or unpaid wages, along with a $1,500 penalty.
Wage violations can also mean private lawsuits from affected employees. Illinois workers have the right to recover triple the amount of underpaid wages, plus legal fees through civil litigation. Since the statute of limitations for wage claims is three years in Illinois, these violations can create long-term liability for non-compliant employers. As such, the Department of Labor conducts regular investigations and responds to employee complaints about wage violations.
Besides legal action, employers can also face revocation of licenses or permits and severe reputational damage for repeated or especially egregious violations.
Get and Stay Compliant with Mosey
Navigating Illinois minimum wage laws in 2025 is no easy task for employers. With tiered wage structures for different worker categories, separate local ordinances, and strict recordkeeping requirements, businesses face complex compliance terrain—and any misstep can be costly.
Mosey makes your life easier by simplifying multi-state, multi-faceted employee management needs. With Mosey, you can automate labor notices and posters in every state, track legislation changes, and provide up-to-date, lawyer-written policies for your handbook. In other words, Mosey takes the headache and stress out of Illinois employment law compliance and enables you to focus on growing your business. So, book a demo today and see what a difference Mosey can make for you.
