The yearly incremental hourly minimum wage increase will take effect on July 1, meaning many Chicago workers will receive a midsummer raise. A new paid time off policy, among other measures, is also slated to take effect at the beginning of next month.
Chicago's hourly minimum wage will increase from $15.80 to $16.20 for employers with 21 or more employees and from $15 to $16.20 for employers with 20 or fewer employees, removing the tiered wages for large and small businesses.
Since increasing to $15 in 2021, the hourly minimum wage increases annually according to changes in the Consumer Price Index or at a rate of 2.5%, whichever is lower, according to Johnson's office.
Additionally, the hourly minimum wage will be subsidized for youth programs, with the minimum wage for subsidized transitional employment programs set at $15.
As part of the One Fair Wage ordinance, the tipped wage credit for tipped workers is being phased out over a five-year period.
Wages of tipped workers, such as restaurant servers, bartenders and bussers who currently earn an hourly minimum wage of $11.02 will see a yearly increase of 8% until it reaches parity with the city's standard minimum wage on July 1, 2028.
Additionally, according to Mayor Brandon Johnson's office, implementation of the Paid Leave and Paid Sick and Safe Leave Ordinance, and a "scheduled enhancement" of the Fair Workweek Ordinance requirements will all take effect on July 1.
Under the measure, all Chicago workers who work at least 80 hours within any 120-day period are guaranteed up to five days of paid leave and five days of paid sick leave.
The paid leave requirements state the following:
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- Employees accrue at a rate of 1 hour of paid leave for every 35 hours worked (up to 40 hours in a 12-month period)
- Employees must be allowed to use accrued paid leave no later than on the 90th day following the commitment of employment
- Employees can carry over up to 16 hours between 12-month periods (if paid leave is not front loaded).
- Employees can use paid leave for any reason
The paid sick and safe leave requirements state the following:
- Employees accrue at a rate of 1 hour of sick leave for every 35 hours worked (up to 40 hours in a 12-month period)
- Employees must be allowed to use accrued sick leave no later than on the 30th day following the commitment of employment
- Employees can carry over up to 80 hours between 12-month periods
- Employees can use paid sick leave for medical and safety reasons
The Fair Workweek Ordinance will also include updated compensation metrics beginning on July 1.
Employees are covered under the ordinance if they work in one of the seven "covered" industries, which include the following:
- Building services
- Health care
- Hotels
- Manufacturing
- Restaurants
- Retail
- Warehouse services
Additionally, employees must earn less than or equal to $31.85 per hour or less than or equal to $61,149.35 a year and if the employer has at least 100 employees globally.
If operating a restaurant, there must be 250 employees and 30 locations.
The ordinance requires certain employers to provide workers with "predictable work schedules and compensation for changes."
