What are the new laws in Illinois for 2024?
New year, new laws! In our 2024 annual legislative digest for Illinois’ small business community, we highlight five new laws that take effect this year and one existing law getting an upgrade. Please note: This post covers only some of the new legislation taking effect this year and, while these laws certainly affect small businesses, there may be others as well. These laws make the following changes:
- The Corporate Transparency Act will require businesses to file new information reports about their owners.
- There are new paid leave requirements in Illinois and Chicago that all employers must abide by.
- Chicago’s subminimum wage for tipped workers will start phasing out in July.
- Many employers must offer a retirement plan to their employees or refer them to the state-created option.
Corporate Transparency Act
Last September the Financial Crimes Enforcement Network (FinCEN) announced a brand new set of reporting requirements that apply to the vast majority of businesses in the United States. These rules will implement the Corporate Transparency Act (CTA), which was enacted in 2021. In an effort to combat the use of shell and front companies for illicit financial activity, businesses will now have to provide information about their owners to FinCEN. Here’s what you need to know:
- It defines which companies will have to report (most of them), defining terms such as domestic and foreign reporting companies, beneficial owners, and company applicants.
- A company’s Beneficial Ownership Information (BOI) reports must include the following for each beneficial owner: their name, birthdate, address, and a unique identifying number and the issuing jurisdiction from an acceptable identification document (as well as the image of such document).
- The rule takes effect January 1, 2024. Companies created or registered after that date will have 30 days to submit their BOI report. Companies created or registered before that date will have one year to submit their BOI report (until January 1, 2025).
You can find more detail on FinCEN’s fact sheet.
A lot of information is still coming about the Corporate Transparency Act. FinCEN has yet to release the forms and system for submittal (they have named the system, though: the Beneficial Ownership Secure System, or BOSS). Keep an eye out for more details about the forms, assurances about data security, and guidance for reporting companies.
Day and Temporary Labor Services Act
In August of 2023, Governor Pritzker signed the Day and Temporary Labor Services Act (HB 2862), which changes how temporary workers (such as for a temp agency) must be paid in the state. Major changes include:
- Temporary workers assigned to a third-party client for at least 90 calendar days must be paid no less than the client’s lowest paid directly hired employee in a comparable position. In the absence of a comparable employee, the temporary worker must be paid no less than the client’s lowest paid directly hired employee.
- Temp agencies may pay the worker the hourly cash equivalent of benefits in lieu of benefits.
- Third-party clients must provide the temp agency with information about job duties, training, pay, and employee benefits if temporary workers are assigned to them for more than 90 calendar days.
The Illinois Department of Labor also has a list of Frequently Asked Questions on their website, available here.
Paid Leave for All Workers Act and Chicago Ordinance
Last March, Illinois passed the Paid Leave for All Workers Act, which requires ALL employers in the state to provide their employees at least 1 hour of paid leave for every 40 hours they work.
Then, the City of Chicago updated their existing policy to become even more generous than the state law. On November 9th, 2023, the City Council voted to update Chicago’s ordinance. The official approved text can be found here, but the city hasn’t yet updated the official code or published additional guidance for the new law. We’ll provide more specifics as they become available. Employers in Chicago will now be required to provide employees with at least 1 hour of paid leave and 1 hour of paid sick leave for every 35 hours they work.
One Fair Wage Ordinance
Chicago’s One Fair Wage Ordinance, approved on October 6th 2023, will end subminimum wages for tipped workers in the city.
Subminimum wages will increase by 8% every year until they match the standard minimum wage, which will occur in 2028.
Each yearly increase will take effect on July 1st. The first increase is scheduled for July 1st, 2024.
Chicago Minimum Wage 2024
While we’re talking about minimum wage, the minimum wage in Illinois rises again. On January 1st, it will rise from $13/hour to $14/hour as a result of 2019’s Lifting Up Illinois Working Families Act, which plans to incrementally increase the minimum wage to $15/hour by 2025. The Illinois Department of Labor published a handy summary if you don’t feel like reading the whole act (we don’t blame you).
Wages for tip-earning workers will increase to $8.40/hour. However, per the law, “these workers must still earn the minimum wage after receiving tips, or the employer is required to make up the difference.”
Workers under 18 who work fewer than 650 hours a year must make a minimum of $12/hour.
Meanwhile, the minimum wage for Chicago employers with more than 20 workers increased to $15.80/hour this past July and will increase again this year by 2.5% or the rate of inflation, whichever is lower. As of July 1st, 2024, Chicago employers with 20 or fewer workers will increase to match the regular rate.
Illinois Secure Choice
As of November 1st, 2023, Illinois employers who have been in business for at least two years and have five or more employees must offer a retirement plan. The State provides a public option, called Illinois Secure Choice, if the employer can’t afford one. It’s also available to self-employed individuals. Illinois Secure Choice features:
- No employer fees
- No employer contributions required
- Employers are not responsible for administration
- Employees can transfer their account if they change jobs
What should my business do to prepare for these new laws?
Of course, we want to leave you with some action items!
- Most of these updates pertain to wages and employment policies. As such, make sure your employment policies get adjusted for new paid leave and new wage requirements. Not sure where to start? Get in touch and we can help.
- Double-check that you’re in compliance with the Secure Choice requirements. If you aren’t, reach out and we’re happy to connect you with our network.
- Sign up for our newsletter for future updates.
- Follow us on Facebook and LinkedIn to stay informed about all of these changes as they take effect.
- Seriously, sign up for our newsletter and follow us on Facebook and LinkedIn. You’ll have preparations to make for the Corporate Transparency Act’s filings, but since they have yet to publish what they expect, we can’t tell you about them here.
So here’s to 2024! It’ll be here before we know it. Let’s make it a good one.