Illinois Minimum Wage 2026: Statewide and Chicago Rates

Illinois has one of the more complex minimum wage landscapes in the country. The statewide rate, Chicago's separate ordinance, Cook County's own rules, and special provisions for youth and tipped workers mean that Illinois employers must track multiple rates depending on where their employees work and who those employees are. This guide breaks down every rate that matters in 2026, explains how annual increases work, and gives you practical compliance steps.

Illinois Statewide Minimum Wage

Illinois reached its current statewide minimum wage of $15.00 per hour effective January 1, 2025. This was the final step in a phased series of increases signed into law in 2019 under the Illinois Minimum Wage Law (820 ILCS 105).

History of Illinois Minimum Wage Increases

The phased increase schedule that brought Illinois to $15.00/hr:

• January 1, 2020: $9.25/hr
• January 1, 2021: $11.00/hr
• January 1, 2022: $12.00/hr
• January 1, 2023: $13.00/hr
• January 1, 2024: $14.00/hr
• January 1, 2025: $15.00/hr

Future increases beyond $15.00 may be indexed to the Consumer Price Index (CPI), though the specific mechanism depends on further legislative action. Employers should watch for announcements from the Illinois Department of Labor (IDOL) each fall.

Illinois vs. Federal Minimum Wage

The federal minimum wage remains $7.25/hr — unchanged since 2009. Because Illinois law sets a higher rate, the state rate applies. The general rule is straightforward: when state and federal minimum wage rates differ, employers must pay whichever rate is higher. In Illinois, that means $15.00/hr for most workers.

Chicago Minimum Wage

Chicago maintains its own minimum wage under the Chicago Minimum Wage Ordinance, which is separate from and higher than the state rate. For 2025, the Chicago minimum wage is $16.20/hr for large employers (those with 21 or more employees). Small employers (4–20 employees) may have a slightly lower rate, though the gap narrows with each annual adjustment.

Key Rules for Chicago Employers

• Large employers (21+ employees): $16.20/hr
• Small employers (4–20 employees): A separate, slightly lower rate that increases annually toward parity with the large employer rate
• Annual CPI-indexed increases: Chicago's rate increases every July 1 based on the Consumer Price Index, ensuring the wage keeps pace with inflation
• Location-based applicability: The Chicago rate applies based on where the work is performed, not where the business is headquartered. An employer based in Naperville whose employee works two days a week in Chicago must pay that employee at least the Chicago rate for those hours

Cook County Minimum Wage

Cook County (outside of Chicago) has its own minimum wage ordinance that sets a rate higher than the state but lower than Chicago. The current Cook County minimum wage is $14.05/hr, and it also increases annually based on CPI adjustments.

Municipal Opt-Outs

Not every municipality within Cook County follows the county ordinance. Some suburbs have opted out of the Cook County minimum wage, meaning the Illinois statewide rate of $15.00/hr applies instead. Notably, because the state rate has now reached $15.00/hr (exceeding the Cook County rate of $14.05/hr), the practical impact of the opt-out has diminished — employees in opted-out municipalities are still entitled to at least the state minimum of $15.00/hr.

Employers operating in Cook County should verify whether their specific municipality participates in the county ordinance, as the county rate will eventually rise above the state rate through CPI indexing.

Youth and Training Wage

Illinois law allows a reduced minimum wage for certain young workers:

• Youth wage: Workers under 18 years old who work fewer than 650 hours in a calendar year for the employer can be paid $13.00/hr (the rate in effect as of 2025)
• Training wage: For the first 90 consecutive days of employment, workers under 18 may be paid a lower training wage. This is intended to encourage employers to hire and train young workers

Restrictions on Youth Employment

Illinois places significant restrictions on the employment of minors beyond just the wage rate:

• Workers under 16 may not work more than 8 hours per day or 48 hours per week during non-school periods, with stricter limits during the school year
• Certain hazardous occupations are prohibited for workers under 18
• Employers must obtain and keep on file employment certificates (work permits) for minors under 16
• Night work restrictions apply — generally, workers under 16 cannot work past 7:00 PM on school nights (extended to 9:00 PM during summer)

Tipped Employee Minimum Wage

Illinois allows employers to take a tip credit — meaning tipped employees can be paid a base wage lower than the standard minimum wage, as long as tips bring their total compensation to at least the full minimum wage.

How the Illinois Tip Credit Works

• Tipped minimum wage: Employers may pay tipped employees 60% of the standard minimum wage. At the current $15.00/hr statewide rate, that equals $9.00/hr
• Tip credit: The remaining $6.00/hr (the difference between $15.00 and $9.00) is the tip credit the employer takes
• Make-up-the-difference rule: If an employee's tips do not bring their total hourly compensation to at least $15.00/hr for any pay period, the employer must make up the difference. The employee is always guaranteed at least the full minimum wage
• Qualifying tipped employees: The tip credit applies only to employees who customarily and regularly receive more than $20 per month in tips

Chicago Tipped Wage

Chicago has its own tipped minimum wage rules under its ordinance. Tipped workers in Chicago are also subject to the 60% rule, but calculated against the higher Chicago minimum wage of $16.20/hr. That means the tipped minimum wage in Chicago is approximately $9.72/hr for large employers, with tips required to bring the total to at least $16.20/hr.

Illinois vs. California: Tip Credit Comparison

Unlike Illinois, California allows no tip credit whatsoever. In California, tipped employees must be paid the full state minimum wage before tips. Illinois's 60% approach falls in the middle — more generous to employers than California, but significantly more protective of workers than the federal tipped minimum wage of just $2.13/hr.

Annual Indexed Increases

Now that Illinois has reached the $15.00/hr milestone, the question for employers is: what happens next?

• Chicago: Already uses CPI-based annual adjustments. The rate increases every July 1 based on the prior year's Consumer Price Index. This means Chicago's minimum wage will continue to climb each year automatically
• Cook County: Similarly uses CPI-based annual adjustments under its county ordinance
• Statewide: The 2019 law established the phase-in schedule through $15.00/hr. Future increases beyond $15.00 are subject to additional legislation or executive action. Proposals for CPI indexing of the state rate have been introduced but are not yet enacted as of early 2026

Employers should prepare for the likelihood that minimum wage rates — especially in Chicago and Cook County — will continue to increase annually. Building flexibility into your compensation structure now will save headaches later.

Exempt Salary Threshold

Minimum wage rates directly affect the salary threshold for exempt employees under Illinois law. Under the Illinois Minimum Wage Law, an employee classified as exempt from overtime must earn a salary that meets or exceeds a minimum tied to the state minimum wage.

• The federal salary threshold for the FLSA white-collar exemption is $684/week ($35,568/year) under current federal rules, though proposed increases may raise this significantly
• Illinois employers must comply with whichever threshold is higher — federal or state
• As the minimum wage rises, the floor for exempt salary classification effectively rises too, potentially pushing more employees into non-exempt (overtime-eligible) status

If you have employees classified as exempt who earn salaries near the threshold, review their classification whenever minimum wage rates change. Misclassification carries significant penalties.

Penalties for Minimum Wage Violations

The Illinois Minimum Wage Law provides strong enforcement mechanisms. Employers who violate the law face:

• Back pay: The full amount of underpaid wages owed to the employee
• Statutory damages: Up to 2% of the underpayment for each month the wages remain unpaid, calculated from the date of underpayment
• Triple damages: In some cases, courts may award up to three times the amount of underpaid wages
• Reasonable attorney's fees and costs: The employer may be required to pay the employee's legal fees
• Civil penalties: The Illinois Department of Labor can assess fines for violations
• Criminal penalties: Willful violations can result in criminal misdemeanor charges, with fines up to $2,500 per offense

The cost of non-compliance far exceeds the cost of simply paying the correct wage. A single wage complaint can trigger an investigation that uncovers broader issues.

Compliance Tips for Employers

Staying compliant with Illinois minimum wage law requires ongoing attention. Here are the steps every employer should take:

1. Know which rates apply: Determine whether the statewide, Chicago, or Cook County rate applies to each employee based on where they perform work — not your business address
2. Track hours by location: If employees work across jurisdictions, track hours at each location and apply the correct rate to each set of hours
3. Monitor annual increases: Chicago and Cook County rates change annually. Watch for announcements each summer (Chicago adjusts July 1) and each January for state changes
4. Audit tipped employee pay: Every pay period, verify that each tipped employee's total compensation (base wage + tips) meets or exceeds the applicable minimum wage. Make up any shortfall immediately
5. Track youth employee hours: Monitor the 650-hour calendar-year threshold for youth workers. Once crossed, pay the full adult minimum wage
6. Review exempt classifications: When minimum wage rates increase, review whether your exempt employees still meet the salary threshold
7. Post required notices: Illinois law requires employers to post minimum wage notices in a conspicuous location at the workplace. Chicago has its own posting requirements
8. Use payroll software: Automated payroll software like Gusto can track multiple wage rates, flag compliance issues, and calculate tip credit amounts correctly
9. Keep thorough records: Maintain payroll records for at least 3 years, including hours worked, wages paid, tip records, and youth employee documentation
10. Consult an employment attorney: If you operate in multiple jurisdictions or have complex employee classifications, get professional guidance