Illinois minimum wage: State, Chicago rules, and recent updates

What is Illinois’ current minimum wage, and how is it changing?

The current minimum wage in Illinois is $15 for most workers, following 2019 labor legislation that ensured steady increases through 2025. Here’s a breakdown of the minimum wage increases from 2019 to 2025, and where the current rate sits:

Is $15 an hour the minimum wage for Illinois? Here’s the breakdown

Since early 2025, $15 has been the standard minimum wage for the state of Illinois. But specific regions (including Chicago) maintain different rules and regulations. Businesses that employ certain types of workers — such as those who earn tips or work below the age of 18 — must also follow specific rules. We’ll discuss this in further detail below.

What is the minimum wage in Chicago, and how does it differ?

Pay standards in major US cities often differ from state minimum wage rates, and Chicago is no exception. Chicago’s rules stand out from the rest of Illinois due to the higher wage standards and employer-size distinctions.

How do they work?

• As of July 1, 2025, the standard minimum wage in Chicago is $16.60 per hour for businesses with more than four employees.
• This is $1.60 higher per hour than what the minimum wage in Illinois is statewide.
• Tipped employees may be paid less; the minimum is $12.62, but their wages and tips must combine to at least $16.60 in Chicago. Both minimums are expected to increase annually to account for inflation.

Since the city typically experiences an increase in the summer, there’s a chance it will tick up again on July 1, 2026. As the rates are announced, we’ll add them here.

Illinois minimum wage projections: What’s ahead?

In 2025, Illinois reached its multi-year objective and increased the minimum employee pay rate to $15 per hour. In 2026, there are no further official increases scheduled under existing legislation. But future hikes could still take place according to inflation, economic conditions, or additional legislative action.

Employers should keep a close eye on any and all updates from the Illinois Department of Labor and the state legislature for future developments.

Exemptions and special cases: Who’s not covered by Illinois’ minimum wage?

The $15 minimum wage applies to most workers. But there are exceptions based on age and employment category. For example, in many states, tipped wages can be lower than the standard minimum wage as long as each worker’s total earnings consistently meet the statewide standard. For a tipped employee, such as a waitress, the minimum wage in Illinois is $9.

• If you have employees under 18 who work fewer than 650 hours per year, you’re only required to pay them $13 per hour. But if they work more than that, the statewide standard applies.
• The minimum wage in Illinois for 16-year-olds working at least 650 hours a year is still $15.
• Employers are also permitted to pay new workers of all ages a reduced training wage of $14.50 for the first 90 days of employment.

This does not apply to tipped workers unless the employer chooses to forgo the tip credit.

What is considered a livable wage in Illinois?

There’s a stark difference between a “minimum wage” and a “livable wage” in many US states and cities. The minimum wage simply refers to legal requirements, while a livable wage represents the hourly wage a worker needs to earn to provide for their basic needs, without relying on government assistance. This may include:

• Food
• Housing
• Clothing
• Healthcare
• Transportation
• Childcare needs

The tipped worker/waitress minimum wage in Illinois is $9, and the minimum for standard workers is $15, but according to the MIT Living Wage Calculator, a single adult in Illinois needs $24.42 per hour to meet their basic needs. Chicagoans and parents with dependent children need even more to live comfortably.

How Illinois’ wage laws affect employers in different cities and counties

It’s essential that you understand not only the statewide regulations, but also the local rules and ordinances for your city and county. As the most populous county in Illinois, Cook County has unique laws and regulations.

As of 2025, Cook County adheres to the current $15 minimum wage. We’ve already discussed Chicago’s minimum wage laws, but surrounding municipalities are also permitted to opt out of Cook County’s ordinances and enforce a minimum wage that exceeds the state standard.

This has unique implications for businesses in Cook County, particularly those that operate across multiple jurisdictions. Just like companies that handle payroll in multiple states, Illinois employers must map out their operations and adhere to local ordinances. If the minimum wage for the state and municipality differ, you must apply the highest applicable wage.

Common payroll mistakes employers make (and how to avoid them)

Navigating payroll can be complex for small businesses, and missteps can quickly lead to employee complaints, compliance violations, and costly penalties.

Here are some common payroll mistakes to be aware of and ways you can fend them off:

• Employee misclassification: Never confuse employees with independent contractors or mislabel exempt employees as non-exempt, as this can lead to unpaid wages and tax liabilities.
• Incorrect tip tracking: In hospitality and restaurant management, tracking tips inaccurately can lead to underreported income and tax issues.
• Missing wage updates: Minimum wage and reporting rules change regularly in Illinois and Chicago, so you need to stay alert to avoid following outdated regulations.
• Inaccurate recordkeeping: Misreported hours, wages, or deductions can quickly lead to disputes and unpleasant audits.
• Late or improper tax filings: When you don’t meet payroll tax deadlines and standards, you risk IRS inquiries and possible penalties.