Small businesses – especially the ones that are just starting out – must be mindful of their budget. Unfortunately, many are not quite prepared for the wide range of expenses and legal complexities. Workers’ compensation insurance. Taxes. The list goes on and on. Let one area slip, and the company could face penalties. One example is when companies fail to comply with Illinois’ minimum wage laws. Before you hire an employee, take the time to understand the law and what compliance looks like under it.

Minimum Wage Law Basics

A recently proposed bill may begin a transition to $15 an hour, but right now, employers are only required to meet the current minimum wage of $8.25 per hour. Paying employees any lower than this amount is considered a violation of the minimum wage law. Unfortunately, paying that amount does not necessarily keep your company out of trouble; there are other, more complex laws to account for as well.

In late October, Cook County officials elected to join the city of Chicago in adopting a plan to increase the minimum wage to $13 per hour by 2020. While the decision is being heralded by many as an important step toward increasing the quality of life for the county’s lowest-paid employees, it is also raising a number of concerns for several local communities.

Beginning in July 2017, the new minimum wage in Cook County will be $10 per hour, a substantial increase from $8.25—the current statewide minimum wage. In 2018, the minimum wage will go up to $11 per hour, with $1 per hour increases each year until 2020. The problem, however, is that a number of villages and towns straddle the line between Cook County and other surrounding counties. The line between Cook County and Lake County, for example, runs directly through the village of Barrington. The city of Elgin sits on the border between Cook County and Kane County.

Tough Choices

As stories of fast-food industry workers protesting for higher wages continue to hit headlines around the country, a recent study suggests that such demands may be founded on at least a kernel of truth. Claims have abounded for decades that the federal and state minimum wages could not produce a sufficient income on which to live and raise a family. Researchers have developed a method to quantify exactly what constitutes a living wage for a particular area of the country, and, comparing that to the minimum wage currently in place, establishing a dollar measurement of the gap between the two.

Cost of Living

Amy Glasmeier is a professor of economic geography at the Massachusetts Institute of Technology, better known as MIT. She and a team of researchers developed what they call the Living Wage Calculator designed to take into account various financial, governmental, and tax factors at work in an area to determine a fairly precise cost of living. Applying the calculator to the entire country, Glasmeier found serious discrepancies between the amount per hour required to live and raise a family and the minimum hourly wage in nearly every region of the nation.