2025 Illinois Minimum Wage: Key Changes Employers Must Know
The 2025 Illinois minimum wage increase represents the final step in a statewide plan to improve worker compensation. Beginning January 1, 2025, the minimum wage in Illinois is $15.00 per hour for workers aged 18 and older. This adjustment completes a phased approach that began in 2019 when the minimum wage was $8.25, aiming to increase earnings for low-wage workers across the state gradually.
This wage increase applies to most occupations and is mandated under the Illinois Minimum Wage Law (820 ILCS 105). For workers under 18 who work fewer than 650 hours in a calendar year, the minimum wage is set at $13.00 per hour. Once the 650-hour threshold is exceeded, these workers must be paid the full $15.00 rate. The law also outlines specific conditions for tipped employees, training wages, and workers in unique categories such as sheltered workshops.
The change comes amid nationwide conversations about wage equity, inflation, and economic recovery. Employers and workers must understand the new requirements to ensure compliance and protect rights under state labor law. From tip credit calculations to overtime requirements, this update affects payroll practices across nearly all industries in Illinois.
Overview of the 2025 Illinois Minimum Wage Structure
The Illinois Minimum Wage Law outlines distinct pay categories for various worker types in 2025:
Standard minimum wage: $15.00 per hour for employees 18 and over.
Youth wage: $13.00 per hour for those under 18 working less than 650 hours per calendar year. The wage must increase to $15.00 per hour if they exceed this limit.
Tipped employees: Employers may apply a 40% tip credit, reducing the base wage to $9.00 per hour, provided that combined tips and wages meet or exceed $15.00. Employers may also pay a training wage of $9.00 for the first 90 days.
Training wage: For employees 18 and older, employers may pay up to $0.50 below the standard minimum wage for the first 90 consecutive calendar days of employment, excluding day or temp laborers.
Sub-minimum wage: Employers may still apply for licenses to pay specific learners and individuals with physical or mental disabilities below the minimum wage under tightly regulated conditions.
The minimum wage law also requires that overtime be paid after 40 hours of work in a workweek at a rate of time-and-a-half the employee’s regular pay. Employers must ensure that their wage and hour practices align with state and federal guidelines, particularly regarding eligibility, classification, and exemptions.
Regional Variations Between Chicago and Cook County Minimum Wages
Although the state minimum wage is $15.00 in 2025, local jurisdictions such as Chicago and Cook County may impose higher requirements. As of July 1, 2024, the City of Chicago mandates a minimum wage of $16.20 per hour for non-tipped employees and $11.02 for tipped employees. These figures are adjusted annually in line with the Consumer Price Index. In Cook County, excluding Chicago, the minimum wage mirrors the statewide rate at $15.00 per hour for non-tipped workers and $9.00 for tipped workers. However, municipalities within the county may opt out of this requirement.
Employers must comply with the higher of the applicable federal, state, or local wage rate. That means Chicago-based businesses cannot rely solely on state law compliance. They must also consider local ordinances, especially when managing locations in multiple jurisdictions.
In addition to wage rates, local rules may impact youth employment, required signage, and paid leave laws. Employers with locations in both the city and suburbs must train HR and payroll teams to apply the correct wage rates and benefits depending on the specific work location of each employee.
Responsibilities and Best Practices To Ensure Employer Compliance
To comply with the 2025 Illinois minimum wage requirements, employers must:
Verify all wage classifications: Ensure proper rates are applied to standard, youth, tipped, and training employees.
Update posted notices: Employers are required to visibly post updated minimum wage information in the workplace and, for remote workers, distribute notices via email or company intranet.
Keep accurate records: Employers must retain payroll records for at least three years, including employee hours, pay rates, and classifications. This is critical for wage audits or complaints.
Monitor the 650-hour youth worker threshold: Employers must track hours for workers under 18 and adjust wages once the limit is reached.
Handle sub-minimum wage licensing properly: Sheltered workshops and employers using learner or disability exemptions must obtain valid licenses. These certificates will no longer be recognized after December 31, 2029.
Employers must also correctly apply overtime rules and avoid offering "comp time" as a substitute, which is prohibited in the private sector. Misclassifying employees or underpaying wages can result in significant penalties, including triple damages and attorney fees under Illinois law. Staying informed and aligned with the Illinois Department of Labor’s guidance is essential to avoid liability.
Preparing for the 2025 Illinois Wage Increase
The 2025 Illinois minimum wage increase completes a multi-year initiative to enhance economic fairness and improve living conditions for working families across the state. While this marks a significant step toward wage equity, employers must proactively align policies, systems, and training with the latest labor standards.
Understanding the layered structure of the Illinois Minimum Wage Law—covering youth employment, tipped labor, training rates, and sub-minimum licensing—is essential for compliance. Employers must pay close attention to the evolving rules, especially in complex areas such as tip credits and youth hour tracking.
The Illinois Department of Labor provides ongoing resources and technical assistance to help businesses navigate these requirements. Employers can avoid fines, reduce legal risk, and build fairer workplaces by taking early action. For questions or support, companies can contact the IDOL directly at (312) 793-2804 or DOL.MWOT@Illinois.gov.
As Illinois enforces these final wage benchmarks, the emphasis remains on protecting worker dignity while supporting transparent, compliant employment practices across every industry. To learn more about the minimum wage law and how it impacts your rights, contact the Chicago-based civil rights and employment law firm at O’Malley & Madden, P.C.
