Chicago Minimum Wage Increases in July 2025 for Employees
As of July 1, 2025, the Chicago minimum wage has increased again, giving workers across the city a boost in earnings. Whether you work full-time, part-time, in a restaurant, or as a domestic worker, it is essential to understand how much you are legally entitled to earn and how to ensure your paycheck reflects that amount.
The team at O’Malley & Madden, P.C. breaks down the new wage rates, who qualifies for them, how tipped pay works under the city’s phased-in model, and how Chicago’s rates compare to other areas.
New Wage Rates in 2025: What Workers Need to Know
Starting July 1, 2025, the City of Chicago raised its minimum wage as part of its annual cost-of-living adjustment. The current wage rates are:
Standard minimum wage: $16.60 per hour
Subsidized youth and transitional program workers: $16.50 per hour
Tipped wage: $12.62 per hour
Overtime rate (for hours beyond 40 per week): $24.90 per hour for standard workers, adjusted accordingly for other categories
If you are a tipped employee and your combined tips and hourly wage do not equal or exceed $16.60 per hour, your employer is legally required to pay the difference between the minimum wage and the actual wage. This applies across all industries, including restaurants, salons, hospitality, and other service roles. Domestic workers, regardless of their job title or employment arrangement, are entitled to the full minimum wage of $16.60 per hour.
Who Is Covered Under the New Chicago Minimum Wage?
The new minimum wage ordinance covers most workers in Chicago. This includes full-time and part-time employees, temporary workers, domestic workers, and individuals in subsidized youth or transitional employment programs. The ordinance applies to all businesses with four or more employees.
It does not matter if you are paid hourly, salaried, or per assignment. If your adequate hourly compensation is below the minimum after accounting for total hours worked, your employer is obligated to correct that. Remote employees working for Chicago-based companies may also be covered, depending on the location where the work is performed. If your situation is unclear, it is advisable to consult with a legal professional or review guidance from the Chicago Office of Labor Standards.
Tipped Workers and the One Fair Wage Ordinance
Workers who earn tips as part of their compensation are subject to a special set of rules under the One Fair Wage Ordinance. This ordinance began phasing out subminimum tipped wages in 2023 and will continue until full parity is reached with the city’s standard minimum wage in 2028.
For now, tipped workers are entitled to a base wage of $12.62 per hour, with mandatory annual increases of 8 percent. Employers must ensure that employees receive at least $16.60 per hour after tips are added. If not, they are legally required to make up the difference.
Workers in positions such as serving, bartending, food delivery, and personal care should carefully review their pay stubs to ensure accuracy and verify the details. Ensure you are being paid the correct base wage and that tips are accurately tracked. Tip pooling or tip-sharing arrangements must still result in your total compensation meeting or exceeding the legal minimum.
How to Protect Your Rights as an Employee
If you believe you are not being paid the correct Chicago minimum wage, you have options available to you. Start by reviewing your pay stubs and tracking your hours and earnings independently. This helps you spot any discrepancies and build documentation if you need to take action.
You can file a complaint with the Chicago Office of Labor Standards using the CHI 311 system. Complaints can be submitted online, by phone, or through the city’s complaint form. Workers are protected from retaliation for asserting their rights under wage laws, so do not hesitate to speak up if something seems wrong.
Legal representation may be helpful if your employer refuses to correct underpayment, retaliates against you, or engages in wage theft. In such cases, experienced employment law attorneys can help you pursue appropriate remedies under city and state law.
Chicago Minimum Wage vs. Illinois and Surrounding Areas
Chicago’s minimum wage is higher than the state’s and many surrounding municipalities. As of 2025, the comparisons are as follows:
Illinois statewide minimum wage: $15.00 per hour
Illinois tipped minimum wage: $9.00 per hour
Illinois youth minimum wage (under 18, under 650 hours/year): $13.00 per hour
Cook County (outside Chicago): Generally follows the state minimums unless local ordinances apply
This means that workers in the city of Chicago make at least $1.60 more per hour than most other employees in Illinois. For tipped workers, the difference is even more pronounced.
Over a year, that pay gap can result in thousands of dollars in additional earnings. If you live outside the city but work within city limits, your employer must follow Chicago wage law, not the statewide rate.
Contact O’Malley & Madden for Legal Guidance Regarding the Chicago Minimum Wage
The Chicago minimum wage increase that took effect on July 1, 2025, represents another step toward ensuring fair pay for workers across the city. Whether you are new to the workforce or a seasoned employee, understanding your rights and reviewing your paychecks can help ensure you are being appropriately compensated.
If you believe your employer is not complying with wage laws, resources are available through the Office of Labor Standards. And if you need legal support, particularly in cases of underpayment, retaliation, or other employment violations, the team at O'Malley & Madden, P.C. is here to help.
