On February 7, 2019, the Illinois senate voted and passed Senate Bill 1, which proposes to raise the current minimum wage from $8.25 to $15.00/hour. If signed into law, the plan would be to gradually increase the minimum wage each year until it reaches $15.00/hour in 2025. The current proposal would increase the minimum wage to $9.25/hour beginning January 1, 2020; $10.00/hour on July 1, 2020; $11.00/hour on January 1, 2021, and then by a dollar every year until it reaches $15.00/hour in 2025.
The Bill also provides that employers with 50 or fewer full-time equivalent hourly employees would initially be given a tax credit of 25%. However, this credit would decrease by 4 percent each year until it reaches 5% in 2027. After 2027, only employers five full-time employees or fewer would be able to claim the 5% tax credit. The Department of Labor would also be allowed to perform random audits of any employer to ascertain compliance with the minimum wage law.
To account for employees who earn tips, the Bill would continue to allow employers to pay less than the minimum wage as long as the tips and hourly wage amount to the minimum wage or higher. In addition to the tip exception, the bill also allows for teenage workers to be paid below minimum wage.
Governor Pritzker, whose campaign expressed a desire to increase the minimum wage, has already expressed his support of this Bill. In order to become law, the Bill must also gain the support of the Illinois House of Representatives.
Some lawmakers worry that increasing the minimum wage will have unforeseen costs and residual effects, possibly harming the very people the bill seeks to help. Illinoispolicy.org has reported that the estimated costs to taxpayers to raise only the minimum wage for state workers would cost nearly $1.1 billion. While the fate of this Bill remains uncertain, if passed, it could have consequences for nearly everyone in Illinois.
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