Thursday, September 19, 2019

Prepare for Minimum Wage Increase Now

Earlier this year, SB1, the "Lifting Up Illinois Working Families Act," was passed by the Illinois General Assembly and signed into law by Governor JB Pritzker.  It takes effect on January 1, 2020 - just over 3 months from today.

The impact on businesses will be significant.  Over the next five years, the minimum wage will increase from $8.25 per hour to $15.00 for workers 18 years and older.  For employees who are under 18 years of age who work less than 650 hours in a year, the minimum wage will increase from $7.75 to $13.00 during the next five years.

Date                    18 & Older                Under 18
Current                       $   8.25                    $   7.75
January 1, 2020          $   9.25                    $   8.00
July 1, 2020                $ 10.00                    $   8.00
January 1, 2021          $ 11.00                    $   8.50
January 1, 2022          $ 12.00                    $   9.25
January 1, 2023          $ 13.00                    $ 10.50
January 1, 2024          $ 14.00                    $ 12.00
January 1, 2025          $ 15.00                    $ 13.00

Some employers may be able to claim a payroll withholding tax credit for a percentage of the increased wages under SB1.  The credit can be taken on the quarterly tax withholding returns for periods beginning on July 1, 2020.  Not all businesses will qualify for the credit.  Employers should consult with their tax advisors to determine their eligibility.


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