Illinois Minimum Wage 2026: What Employers Must Know

The Illinois minimum wage in 2026 is $15.00 per hour, more than double the federal minimum wage of $7.25, according to the U.S. Department of Labor.

For Illinois employers, that rate interacts with overtime rules, a specific employer-size threshold, and the state's Paid Leave for All Workers law. This guide covers what employers need for payroll compliance in 2026.

Illinois Minimum Wage vs. Federal Minimum Wage

Illinois employers must pay the higher of the two rates. Since the state minimum exceeds the federal rate, $15.00 per hour applies to covered employees statewide.

Overtime Rules in Illinois

Illinois calculates overtime on a weekly basis: nonexempt employees are owed 1.5 times their regular rate for hours worked over 40 in a workweek. There is no daily overtime requirement under Illinois law.

Small-Employer Threshold

Illinois minimum wage law applies to employers of 4 or more employees, with family members generally excluded from that headcount for purposes of the threshold. Employers near this size should confirm their specific coverage status with the Illinois labor office, since misclassifying employer size can create compliance exposure.

Paid Leave Requirements

Illinois requires Paid Leave for All Workers, which allows employees to use accrued leave for any reason, not only illness. This is a broader entitlement than a typical paid sick leave law and should be tracked separately in payroll and time-off systems. Illinois does not currently operate a state paid family and medical leave insurance program.

Tipped Wages and Local Ordinances

Tipped employee pay rules, along with any city-level wage ordinances such as those in Chicago, can affect the total amount employees must be paid. Because these rules change and vary by locality, employers should confirm current tipped-wage credit amounts and local requirements at the Department of Labor state contacts page.

What This Means for Payroll Compliance

Illinois payroll compliance means tracking the state minimum wage, the employer-size threshold, overtime, and the Paid Leave for All Workers accrual rules simultaneously, all while watching for city-level ordinances that can raise the bar further.

BEG's managed payroll service builds Illinois' wage floor, overtime rules, and paid leave accrual tracking directly into your payroll configuration, closing out each pay cycle without manual rule-checking.

Learn more about managed payroll in Illinois or HR outsourcing in Illinois to see how BEG supports compliance beyond the pay run.

Frequently Asked Questions