Under an ordinance enacted in 2014 by the Chicago City Council, the minimum wage for Chicago workers increases gradually from $8.25 to $13.00 per hour by 2019, followed thereafter by increases based on the consumer price index (CPI). The minimum wage of tipped employees also increases gradually from $4.95 per hour to $5.95 in 2016, followed thereafter by increases based on the CPI.


The ordinance stipulates that the minimum wage will not increase when the unemployment rate in Chicago for the preceding year, as calculated by the Illinois Department of Employment Security, was equal to or greater than 8.5%. The ordinance also provides that if the CPI increases by more than 2.5% in any year, the minimum wage increase is capped at 2.5%. The first minimum wage increase to $10.00 and $5.45 per hour for tipped employees goes into effect July 1, 2015.


Minimum wage for City of Chicago contractors and subcontractors.


On September 2, 2014, Mayor Emanuel signed an Executive Order requiring all City of Chicago contractors and subcontractors pay their employees a minimum of $13 per hour for work performed under a City contract. On September 30, 2014, the Mayor requested that all City of Chicago sister agencies follow suit.


Other employer requirements effective July 1, 2015:


Proof of gratuity paid to tipped employees.


Employers that pay a covered tipped employee must make available at the request of the Commissioner of Business Affairs and Consumer Protection substantial evidence that establishes: (i) the amount the employee received in gratuities during the relevant pay period and (ii) that no part of that amount was returned to the employer. If an employer is required by the state minimum wage law to provide substantially similar data to the Illinois Department of Labor, the Commissioner may allow the employer to comply with this requirement by filing a copy of the state documentation.


Workplace notice of minimum wage.


Employers with a business facility in the City at which a covered employee works must post notice at the facility of: (i) the City minimum wage and (ii) the employee’s rights under the ordinance. Note that employers that do not maintain a business facility within the geographic boundaries of the City and households that serve as the worksite for domestic workers and home healthcare workers are exempt from this requirement.


Paycheck notice of minimum wage.


Employers must provide with the first paycheck issued to any covered employee a notice advising the employee of: (i) the City minimum wage and (ii) the employee’s rights under the ordinance.


*Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Dedicated Account Manager. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.