Hourly minimum rises to $10 on July 1, 2015, and will reach $13 in 2019

conceptual sign with words minimum wage increase  ahead over blue skyChicago’s Minimum Wage Ordinance takes effect July 1, 2015, raising the minimum wage to $10 per hour for non-tipped employees and $5.45 for tipped employees.

It provides for subsequent raises each July 1 until the hourly minimum wage reaches $13 for non-tipped employees in 2019. The full text of the ordinance can be found here.

The ordinance affects employers with at least four employees (and at least one covered employee) who maintain a business facility within the geographical boundaries of Chicago or are subject to licensing requirements under Title IV of the Municipal Code of Chicago. A “covered employee” is one who works at least two hours within Chicago’s geographic boundaries in any two-week period. This includes employees making deliveries or traveling within the city if the employee is compensated for that time.

Employers should be aware of the ordinance’s posting requirements. Specifically, the notice must be posted in a conspicuous location in each of the employer’s facilities within the city’s boundaries. Covered employers also must provide the notice to each covered employee with their July 1, 2015, paycheck.

Between now and July 1, 2019, the hourly minimum wage for non-tipped employees will increase according to the following timeline:

  • 2016: $10.50
  • 2017: $11
  • 2018: $12
  • 2019: $13

Beginning in 2020, the hourly minimum wage for Chicago workers will increase each year at a rate proportional to the Consumer Price Index measure of inflation. However, such increases will not exceed 2.5 percent annually, and there will be no increase in hourly minimum wage if the unemployment rate in Chicago for the year prior was 8.5 percent or higher.

For tipped employees, the timeline looks a bit different. The hourly minimum wage for tipped employees will increase to $5.95 in 2016 and will then increase based on the Consumer Price Index measure beginning in 2017. Similarly, the increase will not exceed 2.5 percent and there will be no increase if Chicago’s unemployment rate for the year prior was 8.5 percent or higher.

If you have questions about the Chicago Minimum Wage Ordinance or the requirements it imposes upon employers, please contact the Employment & Labor Group.

This blog was written with assistance from Audrie Howard, a summer law clerk for the Employment & Labor Practice Group.