Finance Illinois

Chicago Minimum Wage Hike to Roll Out from July 1; New Leave Policy To Go in Effect the Same Day

Chicago Minimum Wage Hike to Roll Out from July 1; New Leave Policy To Go in Effect the Same Day

Starting on July 1, Chicago workers will see a boost in their pay as the yearly incremental hourly minimum wage increase goes into effect. This midsummer raise will provide a welcome increase in income for many workers.

Starting next month, there will be a new paid time off policy, along with other measures, that will be implemented as per NBC Chicago.

Chicago’s minimum wage is set to rise, with employers of all sizes seeing an increase in hourly pay. For businesses with 21 or more employees, the wage will go up from $15.80 to $16.20. Meanwhile, employers with 20 or fewer employees will also see their minimum wage increase from $15 to $16.20.

This change eliminates the previous tiered wage system that differentiated between large and small businesses.

According to Johnson’s office, the hourly minimum wage has been increasing annually since 2021. The increase is based on changes in the Consumer Price Index or a rate of 2.5%, whichever is lower.

In addition, there will be a subsidy for youth programs that will cover the hourly minimum wage. The minimum wage for subsidized transitional employment programs will be set at $15.

The One Fair Wage ordinance is gradually eliminating the tipped wage credit for tipped workers over a span of five years.

Tipped workers, including restaurant servers, bartenders, and bussers, will experience an annual wage increase of 8% until it aligns with the city’s standard minimum wage by July 1, 2028.

In addition, starting on July 1, the Paid Leave and Paid Sick and Safe Leave Ordinance, along with an improvement to the Fair Workweek Ordinance requirements, will be put into action, as stated by Mayor Brandon Johnson’s office.

According to the new policy, all workers in Chicago who put in a minimum of 80 hours within a 120-day timeframe will receive the benefit of up to five days of paid leave and five days of paid sick leave.

Here are the paid leave requirements:

  • Employees earn 1 hour of paid leave for every 35 hours worked, with a maximum of 40 hours in 12 months.
  • Accrued paid leave should be made available to employees within 90 days of their employment commitment.
  • Employees have the option to carry over a maximum of 16 hours of leave from one 12-month period to another, provided that the leave is not front-loaded.
  • Employees are allowed to utilize their paid leave for any reason

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Here are the requirements for paid sick and safe leave:

  • Employees earn 1 hour of sick leave for every 35 hours worked, with a maximum of 40 hours in a 12-month period.
  • Employees should have the opportunity to utilize their accrued sick leave within 30 days of starting their job.
  • Employees are allowed to carry over a maximum of 80 hours from one 12-month period to another.
  • Starting on July 1, the Fair Workweek Ordinance will incorporate revised compensation metrics.

Workers in certain industries are eligible for coverage under the ordinance. These industries are:

  • Services for building construction
  • Health care
  • Accommodation establishments
  • Industry and Dining Establishments
  • Retail Warehouse Services

In addition, employees must have a maximum hourly wage of $31.85 or an annual salary of $61,149.35 if the employer has a global workforce of at least 100 employees.

For running a restaurant, you’ll need a workforce of 250 employees spread across 30 different locations.

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