The Illinois Employment Law Landscape: Key Challenges for Small and Medium Sized Businesses​

The Illinois Employment Law Landscape: Key Challenges for Small and Medium Sized Businesses​

Illinois is known for its robust worker protections and frequent legislative updates. Small and Medium sized Businesses must navigate a patchwork of state, federal, and local laws, with significant penalties for noncompliance. Below, is one of the most pressing employment law challenges facing Illinois employers in 2025 and beyond.

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Wage and Hour Compliance

Minimum Wage  

  • Statewide: Starting January 1, 2025, the Illinois minimum wage is $15.00 per hour for workers aged 18 and older.

  • Tipped Employees: Employers may pay 60% of the minimum wage ($9.00/hour) to tipped employees, provided tips bring total earnings to at least the minimum wage.

  • Youth Workers: Employees under 18 working less than 650 hours per year must be paid at least $13.00/hour.

  • Local Variations: Chicago’s minimum wage is higher ($16.60/hour for most employers as of July 1, 2025)

Overtime and Breaks

  • Overtime: Non-exempt employees must receive 1.5 times their regular rate for hours worked over 40 in a week.

  • Meal and Rest Breaks: Employees working 7.5 hours or more must receive a 20-minute meal break no later than five hours into the shift. Additional breaks are required for longer shifts.

Penalties for Noncompliance

Illinois has increased penalties for wage violations. Employers may face:

  • Damages in the amount of unpaid wages to employees.

  • 5% monthly statutory damages for unpaid wages, accruing until paid.

  • 1% per day penalty for delayed payment after an IDOL order.

  • Administrative fees of $500–$1,250 depending on the amount owed.

  • Personal Civil liability for officers or agents who knowingly permit violations.

  • Criminal Liability for willfully refuses to pay wages, final compensation or wage supplements, or falsely denies the amount owed. 


Harbor and Main Law’s Role:
Our fractional general counsel service ensures payroll practices comply with state and local laws, reviews timekeeping systems, and helps implement policies to avoid wage theft claims. We also assist with responding to IDOL investigations and wage claims..

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