Restaurant Operations
Dec 23, 2024
|
10
min read

What You Need To Know About Minimum Wage In Illinois 2025

Article Outline

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Illinois workers are about to see another boost in their paychecks as the state ushers in its final planned minimum wage increase for 2025. Starting January 1, the hourly minimum wage will climb to $15, marking a milestone in the state's ambitious wage reform journey that began in 2019. This dollar increase from 2024's rate of $14 represents more than just a number – it's a significant victory for over 900,000 Illinois workers who stand to benefit from this change. 

While Chicago continues to lead with even higher wages, this statewide increase positions Illinois among the growing number of states pushing for more competitive wages well above the federal minimum. 

Whether you're an employee, employer, or just someone trying to understand the changing economic landscape in Illinois, here's what you need to know about the new minimum wage requirements for 2025.

What Is The Minimum Wage In Illinois?

As of January 2024, the minimum wage in Illinois is $14.00 per hour for individuals aged 18 and older. Employers paid new non-tipped employees a training wage of $12.50 per hour for the first 90 days of employment, after which the wage must rise to the full minimum wage.

For employees under the age of 18 who work fewer than 650 hours in a calendar year, the minimum wage is $10.50 per hour. Once these young workers reach the 650-hour threshold, their pay must increase to $14.00 per hour. This structured approach provides fair compensation while allowing employers to manage their labor costs.

Looking ahead, the minimum wage in Illinois is scheduled to reach $15.00 per hour in January 2025. This progressive increase positions Illinois as the state with the highest minimum wage in the Midwest, reflecting a commitment to improving the living standards of workers. 

Check out the history of minimum wage rates in Illinois, highlighting the phased increases:

Year

Minimum Wage Rate for Employers 

2020

$10.00 an hour

2021

$11.00 an hour

2022

$12.00 an hour

2023

$13.00 an hour

2024

$14.00 an hour

2025

$15.00 an hour

Types Of Illinois Minimum Wages

In Illinois, the minimum wage structure is multifaceted, encompassing federal, state, and local regulations that reflect the diverse economic conditions across the region. Here’s a breakdown of the different types of minimum wages applicable in Illinois:

Federal Minimum Wage

The federal minimum wage remains at $7.25 per hour, significantly lower than Illinois' state minimum wage. Employers in Illinois must comply with state law, which supersedes federal law when it comes to minimum wage.

State Minimum Wage

Illinois has established a progressive minimum wage to reach $15 per hour by January 2025. This makes Illinois the highest minimum wage state in the Midwest, a significant achievement for advocates of wage increases.

Local Minimum Wage

Local municipalities can set their own minimum wage rates, which may be higher than the state minimum. For example, Chicago's minimum wage laws differ from the state and Cook County regulations. The city plans to increase the minimum wage to $16.20 per hour on July 1, 2024, while also phasing out the tipped minimum wage over the next five years to align it with the standard minimum wage.

Who Benefits From The Minimum Wage Increase In Illinois?

The increase in the minimum wage in Illinois is designed to benefit a wide range of individuals and groups, primarily focusing on low-wage workers and their families.

Low-Wage Workers

Over 200,000 workers in Illinois are expected to be lifted out of poverty due to the minimum wage increase. This change directly impacts those earning the least, providing them with a higher income that can help meet basic living expenses. The increase is particularly beneficial for working families who have been hardest hit by economic downturns, allowing them to afford necessities such as housing, food, and healthcare.

Local Economy

As workers have more disposable income, they are likely to spend more on goods and services, which can lead to increased consumer spending. This boost in spending can help local businesses thrive, generate tax revenues for the state, and create a more robust economic environment.

Illinois Minimum Wage For Tipped Employees

The minimum wage for tipped employees will be $9.00 per hour starting in January 2025. Tipped workers in Illinois have a unique compensation structure, as they must still receive at least the minimum wage, but employers can take credit for the tips they earn. 

Specifically, employers may count tips toward meeting the minimum wage requirement, provided that the total amount from tips does not exceed 40% of the employee's wages. 

Additionally, for tipped employees over the age of 18, employers can pay a training wage for up to 90 days. This training wage is set at $7.80 per hour if the employer is utilizing the tip credit, and $12.50 per hour if they are not. 

What Is The Impact Of Illinois Minimum Wage On Restaurants?

The increase in minimum wage will have significant implications for restaurants and other businesses that rely on tipped workers. While restaurants have no specific minimum wage, they must comply with the minimum wage laws applicable in their locality, whether that be the state, Cook County, or Chicago.

The pressure to balance rising labor costs with profitability is intense for many independent restaurants. The increased minimum wage could further complicate operations with inflation and supply chain issues already straining budgets. Non-compliance with wage laws can lead to serious consequences, including legal claims and financial penalties.

As the minimum wage increases in Illinois, restaurants can adopt several strategies to enhance their business operations and profitability. Here are some effective approaches:

  • Use point-of-sale (POS) data to identify high-margin and high-volume items.
  • Consider raising prices on popular items while keeping less popular items stable.
  • Offer different pricing for dine-in versus takeout orders. For example, charge less for takeout to encourage more customers to choose this option.
  • Implement loyalty programs with discounts or free items.
  • Use labor management tools to analyze staffing needs and schedule employees efficiently based on peak hours.
  • Consider adding catering services, meal kits, or delivery options to reach a broader customer base.
  • Implement employee recognition programs to boost morale and encourage high performance.

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Checkmate’s tech solutions provide restaurants with the tools they need to enhance operational efficiency, improve customer experiences, and ultimately boost profitability. Integrate advanced technology into various aspects of restaurant management—from employee scheduling to personalized marketing. Get a demo today and boost your restaurant’s profitability! 

Brett Spiegel
VP of Direct Ordering
With over ten years of experience, he has developed advanced digital ordering systems for brands of all sizes. Brett co-founded Koala, the pioneering UX-as-a-Service digital ordering platform specifically designed for restaurants. Following the sale of Koala, he joined Checkmate, where he now focuses on creating and enhancing direct ordering solutions, including web and app platforms, kiosks, catering services, loyalty programs, and marketing tools.

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