100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB0002

 

Introduced 1/11/2017, by Sen. Kimberly A. Lightford

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/704A
820 ILCS 105/4  from Ch. 48, par. 1004

    Amends the Minimum Wage Law. Increases the minimum wage from $8.25 to $9.00 beginning July 1, 2017 and increases it by $0.50 each July 1 until July 1, 2021, at which point the minimum wage will be $11.00. Preempts home rule powers, except that the limitation on home rule powers does not apply to specified ordinances adopted by the City Council of City of Chicago or the Cook County Board of Commissioners. Amends the Illinois Income Tax Act. Creates a credit against the withholding tax liability of employers with fewer than 50 employees, calculated based on the increase in the minimum wage. Effective immediately, but this Act does not take effect at all unless Senate Bills 1, 3, 4, 5, 7, 8, 9, 10, 11, 12, and 13 of the 100th General Assembly become law.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0002LRB100 06271 HLH 16308 b

1    AN ACT concerning employment.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 704A as follows:
 
6    (35 ILCS 5/704A)
7    Sec. 704A. Employer's return and payment of tax withheld.
8    (a) In general, every employer who deducts and withholds or
9is required to deduct and withhold tax under this Act on or
10after January 1, 2008 shall make those payments and returns as
11provided in this Section.
12    (b) Returns. Every employer shall, in the form and manner
13required by the Department, make returns with respect to taxes
14withheld or required to be withheld under this Article 7 for
15each quarter beginning on or after January 1, 2008, on or
16before the last day of the first month following the close of
17that quarter.
18    (c) Payments. With respect to amounts withheld or required
19to be withheld on or after January 1, 2008:
20        (1) Semi-weekly payments. For each calendar year, each
21    employer who withheld or was required to withhold more than
22    $12,000 during the one-year period ending on June 30 of the
23    immediately preceding calendar year, payment must be made:

 

 

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1            (A) on or before each Friday of the calendar year,
2        for taxes withheld or required to be withheld on the
3        immediately preceding Saturday, Sunday, Monday, or
4        Tuesday;
5            (B) on or before each Wednesday of the calendar
6        year, for taxes withheld or required to be withheld on
7        the immediately preceding Wednesday, Thursday, or
8        Friday.
9        Beginning with calendar year 2011, payments made under
10    this paragraph (1) of subsection (c) must be made by
11    electronic funds transfer.
12        (2) Semi-weekly payments. Any employer who withholds
13    or is required to withhold more than $12,000 in any quarter
14    of a calendar year is required to make payments on the
15    dates set forth under item (1) of this subsection (c) for
16    each remaining quarter of that calendar year and for the
17    subsequent calendar year.
18        (3) Monthly payments. Each employer, other than an
19    employer described in items (1) or (2) of this subsection,
20    shall pay to the Department, on or before the 15th day of
21    each month the taxes withheld or required to be withheld
22    during the immediately preceding month.
23        (4) Payments with returns. Each employer shall pay to
24    the Department, on or before the due date for each return
25    required to be filed under this Section, any tax withheld
26    or required to be withheld during the period for which the

 

 

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1    return is due and not previously paid to the Department.
2    (d) Regulatory authority. The Department may, by rule:
3        (1) Permit employers, in lieu of the requirements of
4    subsections (b) and (c), to file annual returns due on or
5    before January 31 of the year for taxes withheld or
6    required to be withheld during the previous calendar year
7    and, if the aggregate amounts required to be withheld by
8    the employer under this Article 7 (other than amounts
9    required to be withheld under Section 709.5) do not exceed
10    $1,000 for the previous calendar year, to pay the taxes
11    required to be shown on each such return no later than the
12    due date for such return.
13        (2) Provide that any payment required to be made under
14    subsection (c)(1) or (c)(2) is deemed to be timely to the
15    extent paid by electronic funds transfer on or before the
16    due date for deposit of federal income taxes withheld from,
17    or federal employment taxes due with respect to, the wages
18    from which the Illinois taxes were withheld.
19        (3) Designate one or more depositories to which payment
20    of taxes required to be withheld under this Article 7 must
21    be paid by some or all employers.
22        (4) Increase the threshold dollar amounts at which
23    employers are required to make semi-weekly payments under
24    subsection (c)(1) or (c)(2).
25    (e) Annual return and payment. Every employer who deducts
26and withholds or is required to deduct and withhold tax from a

 

 

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1person engaged in domestic service employment, as that term is
2defined in Section 3510 of the Internal Revenue Code, may
3comply with the requirements of this Section with respect to
4such employees by filing an annual return and paying the taxes
5required to be deducted and withheld on or before the 15th day
6of the fourth month following the close of the employer's
7taxable year. The Department may allow the employer's return to
8be submitted with the employer's individual income tax return
9or to be submitted with a return due from the employer under
10Section 1400.2 of the Unemployment Insurance Act.
11    (f) Magnetic media and electronic filing. Any W-2 Form
12that, under the Internal Revenue Code and regulations
13promulgated thereunder, is required to be submitted to the
14Internal Revenue Service on magnetic media or electronically
15must also be submitted to the Department on magnetic media or
16electronically for Illinois purposes, if required by the
17Department.
18    (g) For amounts deducted or withheld after December 31,
192009, a taxpayer who makes an election under subsection (f) of
20Section 5-15 of the Economic Development for a Growing Economy
21Tax Credit Act for a taxable year shall be allowed a credit
22against payments due under this Section for amounts withheld
23during the first calendar year beginning after the end of that
24taxable year equal to the amount of the credit for the
25incremental income tax attributable to full-time employees of
26the taxpayer awarded to the taxpayer by the Department of

 

 

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1Commerce and Economic Opportunity under the Economic
2Development for a Growing Economy Tax Credit Act for the
3taxable year and credits not previously claimed and allowed to
4be carried forward under Section 211(4) of this Act as provided
5in subsection (f) of Section 5-15 of the Economic Development
6for a Growing Economy Tax Credit Act. The credit or credits may
7not reduce the taxpayer's obligation for any payment due under
8this Section to less than zero. If the amount of the credit or
9credits exceeds the total payments due under this Section with
10respect to amounts withheld during the calendar year, the
11excess may be carried forward and applied against the
12taxpayer's liability under this Section in the succeeding
13calendar years as allowed to be carried forward under paragraph
14(4) of Section 211 of this Act. The credit or credits shall be
15applied to the earliest year for which there is a tax
16liability. If there are credits from more than one taxable year
17that are available to offset a liability, the earlier credit
18shall be applied first. Each employer who deducts and withholds
19or is required to deduct and withhold tax under this Act and
20who retains income tax withholdings under subsection (f) of
21Section 5-15 of the Economic Development for a Growing Economy
22Tax Credit Act must make a return with respect to such taxes
23and retained amounts in the form and manner that the
24Department, by rule, requires and pay to the Department or to a
25depositary designated by the Department those withheld taxes
26not retained by the taxpayer. For purposes of this subsection

 

 

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1(g), the term taxpayer shall include taxpayer and members of
2the taxpayer's unitary business group as defined under
3paragraph (27) of subsection (a) of Section 1501 of this Act.
4This Section is exempt from the provisions of Section 250 of
5this Act.
6    (h) An employer may claim a credit against payments due
7under this Section for amounts withheld during the first
8calendar year ending after the date on which a tax credit
9certificate was issued under Section 35 of the Small Business
10Job Creation Tax Credit Act. The credit shall be equal to the
11amount shown on the certificate, but may not reduce the
12taxpayer's obligation for any payment due under this Section to
13less than zero. If the amount of the credit exceeds the total
14payments due under this Section with respect to amounts
15withheld during the calendar year, the excess may be carried
16forward and applied against the taxpayer's liability under this
17Section in the 5 succeeding calendar years. The credit shall be
18applied to the earliest year for which there is a tax
19liability. If there are credits from more than one calendar
20year that are available to offset a liability, the earlier
21credit shall be applied first. This Section is exempt from the
22provisions of Section 250 of this Act.
23    (i) Each employer that does not employ more than 50
24employees at any time during the applicable payment period may
25claim a credit against payments due under this Section for
26reporting periods that begin on or after July 1, 2017 and end

 

 

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1on or before June 30, 2020, for each qualified employee, in an
2amount equal to: (1) the maximum credit, minus (2) the
3difference between the average wage paid to the qualified
4employee by the employer during the reporting period and the
5minimum wage in effect for that category of employee in the
6jurisdiction where the employee is employed, multiplied by (3)
7the number of hours the employee worked during the reporting
8period.
9    For the purposes of this subsection (i):
10        (1) "Category of employee" means:
11            (A) employees who are under 18 years of age;
12            (B) employees who are 18 years of age or older, but
13        who qualify for a reduced minimum wage as provided
14        under paragraph (2) of subsection (a) of Section 4 of
15        the Minimum Wage Law;
16            (C) employees who are engaged in an occupation in
17        which gratuities have customarily and usually
18        constituted, and have been recognized as part of, the
19        remuneration for hire purposes, as provided in
20        subsection (c) of Section 4 of the Minimum Wage Law;
21            (D) employees who are 18 years of age or older, but
22        who qualify for a reduced minimum wage under Section 5
23        of the Minimum Wage Law;
24            (E) employees who are 18 years of age or older, but
25        who qualify for a reduced minimum wage under Section 6
26        of the Minimum Wage Law; and

 

 

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1            (F) employees who are 18 years of age or older and
2        do not qualify under paragraph (B), (C), (D), or (E) of
3        this item (1).
4        (2) "Employer" and "employee" have the meanings
5    ascribed to those terms in the Minimum Wage Law, except
6    that "employee" also includes employees who work for an
7    employer employing fewer than 4 employees.
8        (3) "Maximum credit" means: (A) $0.45 per hour for
9    qualified employees for whom the employer receives an
10    allowance for gratuities under subsection (c) of Section 4
11    of the Minimum Wage Law; (B) $0.53 per hour for employees
12    who receive a reduced minimum wage under Section 6 of the
13    Minimum Wage Law; and (C) $0.75 per hour for all other
14    qualified employees.
15        (4) "Qualified employee" means an employee making no
16    more than $0.75 per hour more than the minimum wage for
17    that category of employee, except that: (A) in the case of
18    employees who are engaged in an occupation in which
19    gratuities have customarily and usually constituted, and
20    have been recognized as part of, the remuneration for hire
21    purposes, as provided in subsection (c) of Section 4 of the
22    Minimum Wage Law, "qualified employee" means an employee
23    making no more than $0.45 per hour more than the minimum
24    wage for that category of employee; and (B) for employees
25    who qualify for a reduced minimum wage under Section 6 of
26    the Minimum Wage Law, "qualified employee" means an

 

 

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1    employee making no more than $0.53 per hour more than the
2    minimum wage for that category of employee.
3(Source: P.A. 96-834, eff. 12-14-09; 96-888, eff. 4-13-10;
496-905, eff. 6-4-10; 96-1027, eff. 7-12-10; 97-333, eff.
58-12-11; 97-507, eff. 8-23-11.)
 
6    Section 10. The Minimum Wage Law is amended by changing
7Section 4 as follows:
 
8    (820 ILCS 105/4)  (from Ch. 48, par. 1004)
9    Sec. 4. (a)(1) Every employer shall pay to each of his
10employees in every occupation wages of not less than $2.30 per
11hour or in the case of employees under 18 years of age wages of
12not less than $1.95 per hour, except as provided in Sections 5
13and 6 of this Act, and on and after January 1, 1984, every
14employer shall pay to each of his employees in every occupation
15wages of not less than $2.65 per hour or in the case of
16employees under 18 years of age wages of not less than $2.25
17per hour, and on and after October 1, 1984 every employer shall
18pay to each of his employees in every occupation wages of not
19less than $3.00 per hour or in the case of employees under 18
20years of age wages of not less than $2.55 per hour, and on or
21after July 1, 1985 every employer shall pay to each of his
22employees in every occupation wages of not less than $3.35 per
23hour or in the case of employees under 18 years of age wages of
24not less than $2.85 per hour, and from January 1, 2004 through

 

 

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1December 31, 2004 every employer shall pay to each of his or
2her employees who is 18 years of age or older in every
3occupation wages of not less than $5.50 per hour, and from
4January 1, 2005 through June 30, 2007 every employer shall pay
5to each of his or her employees who is 18 years of age or older
6in every occupation wages of not less than $6.50 per hour, and
7from July 1, 2007 through June 30, 2008 every employer shall
8pay to each of his or her employees who is 18 years of age or
9older in every occupation wages of not less than $7.50 per
10hour, and from July 1, 2008 through June 30, 2009 every
11employer shall pay to each of his or her employees who is 18
12years of age or older in every occupation wages of not less
13than $7.75 per hour, and from July 1, 2009 through June 30,
142010 every employer shall pay to each of his or her employees
15who is 18 years of age or older in every occupation wages of
16not less than $8.00 per hour, and from on and after July 1,
172010 through June 30, 2017 every employer shall pay to each of
18his or her employees who is 18 years of age or older in every
19occupation wages of not less than $8.25 per hour, and from July
201, 2017 to June 30, 2018 every employer shall pay to each of
21his or her employees who is 18 years of age or older in every
22occupation wages of not less than $9.00 per hour, and from July
231, 2018 to June 30, 2019 every employer shall pay to each of
24his or her employees who is 18 years of age or older in every
25occupation wages of not less than $9.50 per hour, and from July
261, 2019 to June 30, 2020 every employer shall pay to each of

 

 

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1his or her employees who is 18 years of age or older in every
2occupation wages of not less than $10.00 per hour, and from
3July 1, 2020 to June 30, 2021 every employer shall pay to each
4of his or her employees who is 18 years of age or older in every
5occupation wages of not less than $10.50 per hour, and on and
6after July 1, 2021 every employer shall pay to each of his or
7her employees who is 18 years of age or older in every
8occupation wages of not less than $11.00 per hour.
9    (2) Unless an employee's wages are reduced under Section 6,
10then in lieu of the rate prescribed in item (1) of this
11subsection (a), an employer may pay an employee who is 18 years
12of age or older, during the first 90 consecutive calendar days
13after the employee is initially employed by the employer, a
14wage that is not more than 50 less than the wage prescribed in
15item (1) of this subsection (a); however, an employer shall pay
16not less than the rate prescribed in item (1) of this
17subsection (a) to:
18        (A) a day or temporary laborer, as defined in Section 5
19    of the Day and Temporary Labor Services Act, who is 18
20    years of age or older; and
21        (B) an employee who is 18 years of age or older and
22    whose employment is occasional or irregular and requires
23    not more than 90 days to complete.
24    (3) At no time shall the wages paid to any employee under
2518 years of age be more than 50 less than the wage required to
26be paid to employees who are at least 18 years of age under

 

 

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1item (1) of this subsection (a).
2    (b) No employer shall discriminate between employees on the
3basis of sex or mental or physical disability, except as
4otherwise provided in this Act by paying wages to employees at
5a rate less than the rate at which he pays wages to employees
6for the same or substantially similar work on jobs the
7performance of which requires equal skill, effort, and
8responsibility, and which are performed under similar working
9conditions, except where such payment is made pursuant to (1) a
10seniority system; (2) a merit system; (3) a system which
11measures earnings by quantity or quality of production; or (4)
12a differential based on any other factor other than sex or
13mental or physical disability, except as otherwise provided in
14this Act.
15    (c) Every employer of an employee engaged in an occupation
16in which gratuities have customarily and usually constituted
17and have been recognized as part of the remuneration for hire
18purposes is entitled to an allowance for gratuities as part of
19the hourly wage rate provided in Section 4, subsection (a) in
20an amount not to exceed 40% of the applicable minimum wage
21rate. The Director shall require each employer desiring an
22allowance for gratuities to provide substantial evidence that
23the amount claimed, which may not exceed 40% of the applicable
24minimum wage rate, was received by the employee in the period
25for which the claim of exemption is made, and no part thereof
26was returned to the employer.

 

 

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1    (d) No camp counselor who resides on the premises of a
2seasonal camp of an organized not-for-profit corporation shall
3be subject to the adult minimum wage if the camp counselor (1)
4works 40 or more hours per week, and (2) receives a total
5weekly salary of not less than the adult minimum wage for a
640-hour week. If the counselor works less than 40 hours per
7week, the counselor shall be paid the minimum hourly wage for
8each hour worked. Every employer of a camp counselor under this
9subsection is entitled to an allowance for meals and lodging as
10part of the hourly wage rate provided in Section 4, subsection
11(a), in an amount not to exceed 25% of the minimum wage rate.
12    (e) A camp counselor employed at a day camp is not subject
13to the adult minimum wage if the camp counselor is paid a
14stipend on a onetime or periodic basis and, if the camp
15counselor is a minor, the minor's parent, guardian or other
16custodian has consented in writing to the terms of payment
17before the commencement of such employment.
18    (f) Preemption of home rule powers.
19        (1) The establishment of a minimum wage that employers
20    must pay their employees is an exclusive power and function
21    of the State. Except as provided in paragraph (2) of this
22    subsection (f), a home rule unit may not regulate or
23    establish a minimum wage. This subsection (f) is a denial
24    and limitation of the home rule powers and functions under
25    subsection (h) of Section 6 of Article VII of the Illinois
26    Constitution.

 

 

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1        (2) Paragraph (1) of this subsection (f) shall not
2    apply to Ordinance No. 02014-9680 adopted by the City
3    Council of the City of Chicago on December 2, 2014,
4    provided that: (i) the provisions set forth in that
5    ordinance are not changed by the City Council of the City
6    of Chicago after December 2, 2014; (ii) the minimum wage
7    required to be paid to employees subject to Section
8    1-24-020 of that ordinance beginning July 1, 2019, and each
9    year thereafter, is no greater than $13.00 per hour; and
10    (iii) the minimum wage required to be paid employees
11    subject to that ordinance in occupations receiving
12    gratuities beginning July 1, 2019, and each year
13    thereafter, is no greater than the amount calculated by the
14    Commissioner of Business Affairs and Consumer Protection
15    of the City of Chicago by June 1, 2018 pursuant to
16    paragraph (3) of subsection (a) of Section 1-24-030 of that
17    ordinance. This paragraph (2) of this subsection (f) is a
18    limitation under subsection (i) of Section 6 of Article VII
19    of the Illinois Constitution.
20        (3) Paragraph (1) of this subsection (f) shall not
21    apply to Ordinance No. 16-5768, adopted by the Cook County
22    Board of Commissioners on October 26, 2016, provided that:
23    (i) the provisions set forth in the ordinance are not
24    changed by the Cook County Board of Commissioners after
25    October 26, 2016; (ii) the minimum wage paid to employees
26    subject to Section 42-9 of that ordinance beginning July 1,

 

 

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1    2020, and each year thereafter, is no greater than $13.00
2    per hour; and (iii) the minimum wage required to be paid
3    employees in occupations receiving gratuities, subject to
4    Section 42-10 of that ordinance, beginning on July 1, 2020,
5    and each year thereafter, is no greater than the amount
6    calculated on or before June 1, 2020, pursuant to paragraph
7    (2) of subsection (b) of Section 42-10 of that ordinance.
8    This paragraph (3) of this subsection (f) is a limitation
9    under subsection (i) of Section 6 of Article VII of the
10    Illinois Constitution.
11(Source: P.A. 99-143, eff. 7-27-15.)
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law, but this Act does not take effect at all unless
14Senate Bills 1, 3, 4, 5, 7, 8, 9, 10, 11, 12, and 13 of the
15100th General Assembly become law.