Many Chicago workers will receive a midsummer salary boost, as the yearly incremental rise in the hourly minimum wage and the introduction of a new paid time off policy will kick in at the beginning of the following month, alongside other initiatives.
Minimum Wage Increase in Chicago
Mayor Brandon Johnson's office announced the minimum wage increase, the Paid Leave and Paid Sick and Safe Leave Ordinance to commence by July 1. Chicago's hourly minimum wage will increase from $15.80 to $16.20 for businesses with 21 or more employees and from $15 to $16.20 for those with 20 or fewer employees, eliminating the tiered structure for large and small businesses.
The hourly minimum wage has been annually adjusted based on shifts in the Consumer Price Index or a maximum of 2.5% since its rise to $15 in 2021, as outlined by Mayor Johnson's office. Moreover, there will be a subsidy for youth programs regarding the hourly minimum wage, establishing it at $15 for subsidized transitional employment programs.
The One Fair Wage Ordinance
Under the One Fair Wage ordinance, the tipped wage credit for tipped workers will be gradually eliminated over five years.
Tipped workers, including restaurant servers, bartenders, and bussers, who presently earn an hourly minimum wage of $11.02, will experience an annual increase of 8% until it aligns with the city's standard minimum wage by July 1, 2028.
Moreover, the Chicago Paid Leave and Paid Sick and Safe Leave ordinance, initially approved in November 2023, will also come into force on July 1, where all Chicago workers who clock at least 80 hours within any 120 days will be entitled to up to five days of paid leave and five days of paid sick leave.
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The paid leave stipulations outline the following:
- Employees accrue paid leave at a one-hour rate for every 35 hours worked, with a maximum accumulation of 40 hours over 12 months.
- Employees must be allowed to use accrued paid leave within 90 days of starting their employment.
- If paid leave is not initially provided, employees have the option to carry over up to 16 hours of accrued leave between 12-month periods.
- Employees can use up their paid leave accruals for whatever reason.
The paid sick and safe leave stipulations outline the following:
- Employees accumulate sick leave at a rate of one hour for every 35 hours worked, up to a maximum of 40 hourswithin 12 months.
- Employees are required to be permitted to utilize accrued sick leave no later than the 30th day following the commencement of their employment.
- Employees have the option to carry over up to 80 hours of accrued sick leave between 12-month periods.
- Employees are allowed to use paid sick leave for both medical and safety-related reasons.
Starting on July 1, the Fair Workweek Ordinance will also incorporate updated compensation metrics.
Employees fall under the ordinance's coverage if they are employed in one of the seven designated "covered" industries, which encompass the following:
- Building services
- Health care
- Hotels
- Manufacturing
- Restaurants
- Retail
- Warehouse services
To be covered under the ordinance, employees must earn $31.85 per hour or less or earn $61,149.35 per year or less, and their employer must have at least 100 employees globally. For restaurants, there must be a minimum of 250 employees and 30 locations in operation to fall under the ordinance's coverage. The ordinance also mandates that certain employers offer workers predictable work schedules and compensation for changes.
