The following changes to Chicago employment law take effect on July 1, 2025.

Minimum Wage
For employers with four or more employees, the minimum hourly wage will increase to $16.60. The minimum hourly base wage for tipped employees will increase to $12.62.

Fair Workweek Threshold Increase
The threshold for coverage under the Fair Workweek Ordinance will increase to $62,561.90 per year (if salaried) or $32.60 per hour (if paid hourly).

Paid Leave Payout Reminder
Employers with 51 or more employees will be required to pay out all unused, accrued paid leave (PL) at termination. (Currently, employers with 51–100 employees are only required to pay out up to 16 hours of unused, accrued PL.) Paid sick leave (PSL) still won’t need to be paid out at termination by any employer.

Action Item
Update your Paid Leave and Paid Sick Leave policy as needed, or if you use our Smart Employee Handbook, accept the policy update when you receive notification.