Chicago’s Legal Updates in July 2024

Several laws take effect in Chicago starting on July 1^st, 2024.
Hiring parties will be required to provide more paid leave and sick leave to their workers.
The city’s minimum wage in 2024 will increase.
The tipped minimum wage will begin to be phased out.

State and federal governments usually write laws to take effect on January 1^st, though under state law, Illinois laws can take effect on July 1^st and municipalities can have their own rules about when laws take effect. In Chicago, for example, new laws and ordinances can take effect on almost any date. So in addition to the new laws in 2024, here are some changes going into effect July 1^st that Chicago business owners need to know about!

Chicago Paid Leave and Paid Sick Leave Ordinance

Chicago’s new Paid Leave and Paid Sick Leave Ordinance takes effect on July 1^st, 2024. There are a lot of specific requirements in the statute, like accrual rates, rollover, and so on.

Employers must provide notice of these rules to their employees.
Employers must keep specific and detailed records about employees’ information and their accrued paid leave and paid sick leave.
It will require that employers provide one hour of paid leave and one hour of paid sick leave for every 35 hours worked to all employees. The law includes specific accrual rates and rollover requirements.

You can find the full rules and details here.

Illinois Freelance Worker Protection Act

This is actually a state law with a delayed effective date of July 1^st, 2024. The Illinois Freelance Worker Protection Act does exactly what it says on the tin: it greatly expands protections for freelancers and independent contractors in Illinois.

Freelancers and independent contractors must be paid no more than 30 days after they complete their contracted services, unless other deadlines are laid out within the contract.
It requires that all contracts must be put in writing, whether physically or electronically, and contain:
- The name and contact information of the contractor.
- The name and contact information of the contracting entity
- An itemization of products and services the contractor will provide and their values.
- The rate and method of compensation
- The payment date.
- The date when the contractor will furnish a list of the products and services rendered if such a list is required prior to payment.
The Act outlines procedures for contractors to file complaints with the Department of Labor if the hiring party violates the Act and to pursue civil action in cases of nonpayment.

Model contracts will be available on the Illinois Department of Labor’s website for free. You can find the full text of the law here.

Chicago Minimum Wage Increases

The Chicago minimum wage will increase on July 1^st, 2024.

The non-tipped minimum wage will increase to $16.20/hour.
The tipped minimum wage will increase to $11.02/hour.
Chicago employers with 20 or fewer employees will no longer be subject to a lower minimum wage.

You can find Chicago’s full minimum wage rules here.

One Fair Wage Ordinance

The One Fair Wage Ordinance, approved by the Chicago City Council on October 6^th, 2023, will make the minimum wage for tipped workers (such as waiters) equal to the minimum wage for non-tipped workers. The minimum wage for tipped workers will increase in phases over the next several years, the first of which begins on July 1^st, 2024.

The Ordinance defines the lower tipped minimum wage in terms of a “credit”, a percentage of wages that an employer can retain, rather than a different pay rate in its own right. For instance, right now the employer “credit” is 40% of the standard minimum wage, meaning that tipped employees make 60% of what non-tipped workers do.

The “credit” will decrease to 32% of the applicable minimum wage on July 1^st, 2024.
The “credit” will decrease to 24% of the applicable minimum wage on July 1^st, 2025.
The “credit” will decrease to 16% of the applicable minimum wage on July 1^st, 2026.
The “credit” will decrease to 8% of the applicable minimum wage on July 1^st, 2027.
The minimum wage will reach equity with the standard minimum wage on July 1^st, 2028.

In addition, employers must report the amount each employee earned in tips to the Commissioner of the Department of Business Affairs and Consumer Protection (BACP) during the relevant pay period, and verify that no amount of the tips were returned to the employer.

Note: The City Council may pass an update to this ordinance that advances the timeline, but that hasn’t happened as of the date of writing. If this passes, then the five-phase increase in the tipped minimum wage will shorten to two phases. According to a recent notice from the Chicago Office of Labor Standards, the City appears to be sticking with the original five-phase plan for now.

As you can see, all of these updates involve employment. Keeping your employment documents and policies up to date requires a lot of work, but it’s the best way to stave off even more laborious, irritating, and costly legal trouble. We offer a variety of solutions to fit your unique situation – get in touch to find out how we can help.