Latimer LeVay Fyock, LLCLatimer LeVay Fyock, LLC

Chicago's Higher Minimum Wage and Updated Leave Requirements Kick In on July 1. What Employers Need to Know and Do Now

Chicago employers that have not already done so should review and, if necessary, update their compensation structures and paid leave policies to comply with several amendments to the city’s labor and employment ordinances taking effect on July 1, 2026. Businesses and professional practices with employees working within the City of Chicago should understand these changes and take appropriate steps to minimize compliance risks and potential legal claims.

Higher Minimum Wage

Under Chicago’s Minimum Wage Ordinance, the minimum wage is adjusted annually based on changes in the Consumer Price Index or 2.5%, whichever is lower. Effective July 1, 2026, employers with four or more employees will be subject to the following rates:

  • The general minimum wage will increase to $17.05 per hour.
  • The minimum wage for workers participating in subsidized youth employment programs and subsidized transitional employment programs will also increase to $17.05 per hour.
  • Pursuant to the One Fair Wage Compromise Ordinance, tipped employees—including restaurant servers, bartenders, bussers, and runners—who currently receive the subminimum wage of $12.96 per hour will not receive an increase until the next scheduled adjustment on July 1, 2028.

Paid Leave and Paid Sick Leave Requirements

Chicago’s Paid Leave and Paid Sick and Safe Leave Ordinance provides eligible employees with up to five days of paid leave and five days of paid sick leave if they work at least 80 hours during any 120-day period. The provisions of this Ordinance have been in effect since July 1, 2024, and its substantive provisions are not changing. However, individual employees will now be empowered to file a private right of action for violations of the Ordinance, so it is particularly important to ensure your paid time off policies comply.

Under the Paid Leave provisions:

  • Employees accrue one hour of paid leave for every 35 hours worked, up to 40 hours during a 12-month benefit period.
  • Employees must be permitted to begin using accrued paid leave no later than the 90th day after their employment begins.
  • If paid leave is accrued rather than front-loaded, employees may carry over up to 16 hours into the next 12-month benefit period. If the time is front-loaded, all 40 hours must be granted as of the start of employment and each year thereafter.
  • Paid leave may be used for any reason.

Under the Paid Sick and Safe Leave provisions:

  • Employees accrue one hour of paid sick leave for every 35 hours worked, up to 40 hours during a 12-month period.
  • Employees must be allowed to use accrued sick leave no later than the 30th day following the start of employment.
  • Employees may carry over up to 80 hours of unused sick leave between 12-month benefit periods. Front-loading the sick leave does not change this requirement.
  • Paid sick leave may be used for qualifying medical and safety-related reasons affecting the employee or covered family members.

Private Right of Action for Violations

Until now, enforcement of Chicago’s labor and employment ordinances has been handled exclusively by the Chicago Department of Business Affairs and Consumer Protection’s Office of Labor Standards. Beginning July 1, 2026, however, employees will also have the ability to file civil lawsuits against employers for alleged violations of the city’s minimum wage and paid leave ordinances.

An employee who prevails on a minimum wage claim may recover three times the amount of any unpaid wages, together with interest and reasonable attorney’s fees and costs. Likewise, an employee who successfully proves a violation of the city’s leave ordinance may recover damages equal to three times the value of any leave denied or lost because of the violation, plus interest and attorney’s fees and costs.

Chicago businesses with questions about these changes or that would like assistance reviewing or updating their employment policies to ensure compliance should reach out to your contact at Latimer LeVay Fyock or Saskia Bryan.