Chicago Overtime Pay and Minimum Wage Lawyers

Fair Labor Standards Act (FLSA) Lawyers – Minimum Wage & Overtime Law (2026)

The Fair Labor Standards Act (FLSA) is the primary federal law governing minimum wage, overtime pay, and other basic wage protections for employees in the United States. Under the FLSA, covered, non‑exempt employees must be paid at least the minimum wage for all hours worked, and must receive overtime pay at one‑and‑one‑half (1.5×) their regular rate of pay for all hours worked over 40 in a single workweek.

A workweek is defined as seven consecutive 24‑hour periods (168 consecutive hours). Employers may choose any day of the week to begin the workweek, but once established, it must be applied consistently.

Most employees in the United States are covered by the FLSA. Nevertheless, many employers use unlawful pay practices to reduce labor costs and avoid paying the full wages the law requires. Our firm represents employees in minimum wage and overtime cases under the FLSA, the Illinois Minimum Wage Law, and Chicago’s Municipal Code.

Federal Minimum Wage (2026)

As of 2026, the federal minimum wage remains $7.25 per hour. When a state or local minimum wage is higher than the federal rate, employers must pay the highest applicable wage—whether federal, state, or local.

Illinois Minimum Wage Law (2026)

Illinois has enacted scheduled increases to the state minimum wage. As of January 1, 2025, the Illinois minimum wage reached $15.00 per hour for non‑tipped adult workers and remains in effect in 2026.

Illinois Minimum Wage Schedule

Effective Date Minimum Wage Tipped Wage Youth Wage

1/1/23 $13.00 $7.80 $10.50

1/1/24 $14.00 $8.40 $12.00

1/1/25 $15.00 $9.00 $13.00

2026 $15.00 Subject to tip‑credit rules $13.00

Employers who fail to pay the Illinois minimum wage may be liable for back wages, statutory damages, interest, and attorneys’ fees.

Chicago Minimum Wage Law (2026)

Chicago maintains its own minimum wage ordinance, which often exceeds both state and federal requirements.

As of July 1, 2025, and continuing into 2026:

Employers with 21 or more workers must pay at least $16.20 per hour.

Employers with 4 to 20 workers must pay at least $15.80 per hour.

Tipped Employees in Chicago

Chicago is in the process of phasing out the tip credit:

On July 1, 2024, the allowable tip credit dropped from 40% to 32% of the full minimum wage.

Each year thereafter, the tip credit decreases by 8%.

By July 1, 2028, all Chicago employees—including tipped workers—must be paid the full minimum wage directly by the employer, with no tip credit permitted.

If a tipped employee’s direct wages plus tips do not equal at least the full minimum wage, the employer must make up the difference.

Overtime Law – Common Employer Violations

Employees are entitled to overtime pay unless the employer can prove that a specific exemption applies. Employers frequently violate overtime laws by:

Claiming that an employee is not entitled to overtime simply because they are paid a salary;

Failing to count all compensable work time, including travel between job sites, pre‑shift or post‑shift duties, or required training;

Requiring employees to work “off the clock”;

Using timekeeping systems that round time in a manner that favors the employer;

Assigning inflated job titles (such as “assistant manager”) to improperly claim an overtime exemption;

Paying straight‑time wages for hours worked over 40 instead of overtime;

Averaging hours across multiple weeks (for example, 80 hours over two weeks) instead of paying overtime based on each individual workweek;

Excluding bonuses, commissions, or incentive pay from the regular rate, resulting in underpaid overtime.

These practices are unlawful under the FLSA and Illinois law.

Need help? Contact a lawyer at Werman Salas P.C.

Exemptions from Overtime Pay Law

Understanding the Exemptions and Exclusions from Overtime Pay Law

Exemptions-from-Overtime-Pay-LawThere are several exemptions — or exceptions — from the federal law that requires the payment of overtime pay. Whether any of the exemptions from overtime pay law apply to your employment depends on how you are paid and the specific job duties that you perform in your job. Job title alone never determines your right to overtime pay. And, many states provide greater rights to overtime pay, and fewer exemptions from state overtime pay laws.

Several categories of employment carry specific regulations regarding overtime exemptions, including:

An extensive list of the exempt status of specific jobs is also located on this website. If you have questions about whether you are entitled to overtime pay, contact our office via phone, email, or schedule an in-person consultation.

Need help? Contact a lawyer at Werman Salas P.C.

What Work Time Must Be Paid?

What is Work Time?

What-Work-Time-Must-Be-PaidGenerally, an employer must pay an employee for all time considered to be “work” and all “work” time counts towards hours worked towards overtime. What time is “work time” that must be paid by the employer is often complicated.

The FLSA defines the term “employ” to include the words “suffer or permit to work.” Suffer or permit to work means that if an employer requires or allows employees to work, the time spent is generally hours worked. If the hours are considered to be work, then they must be paid by the employer to the employee. Thus, time spent doing work not requested by the employer, but still allowed, is generally hours worked, since the employer knows or has reason to believe that the employees are continuing to work and the employer is benefiting from the work being done. This time is often referred to as “working off the clock.”

There are many situations that might lead to an employee not getting paid for work time, including:

  • Delivery drivers load a truck, drive to the job site, and then unload the truck. Sometimes, an employer does not begin to pay for the work time until the truck arrives at its destination, so the worker is not paid for the time it took to actually load the truck or to travel to the job site. This is illegal.
  • In an office setting or call-center, many time clocks are on computer workstations. If an employee has to turn on the computer and wait for the software to load before clocking in, he or she is not being paid for work time. This often happens in call centers and may be illegal.

Unpaid work time is a serious problem. Examples of situations where unpaid work time includes time that may or may not be considered hours worked under the FLSA include:

Need help? Contact a lawyer at Werman Salas P.C.

How to Correctly Calculate Overtime Pay

Under the Fair Labor Standards Act (FLSA), overtime pay is calculated based on an employee’s “regular rate of pay,” not simply the employee’s stated hourly wage. In most cases, non-exempt employees must be paid at least one-and-one-half times (1.5×) their regular rate of pay for all hours worked over 40 in a single workweek.

Importantly, the regular rate of pay is often higher than an employee’s base hourly rate. This is because the FLSA requires employers to include nearly all forms of work-related compensation when calculating overtime. As a result, many employees are underpaid overtime even when employers appear to pay “time and a half.”

What Is the “Regular Rate of Pay”?

The regular rate of pay includes all remuneration for employment, unless a specific exclusion applies under the FLSA. This rule applies to both hourly and salaried employees.

Because additional compensation must be factored in, an employee’s regular rate of pay is always equal to or greater than the stated hourly rate.

Payments That Must Be Included in the Regular Rate of Pay

Employers are required to include the following types of compensation when calculating overtime pay:

Commissions and Non-Discretionary Bonuses

Commissions and non-discretionary bonuses must be included in the regular rate of pay. These include bonuses or incentive payments that are:

Tied to hours worked

Based on productivity or performance

Promised in advance

Based on meeting specific metrics or goals

Only truly discretionary bonuses—such as unexpected holiday gifts—may be excluded under limited circumstances.

Incentive Pay

Additional compensation paid for special duties or achievements must be included, such as:

Training or mentoring other employees

Safety bonuses

Attendance bonuses

Production or efficiency incentives

If the payment is connected to the job or performance, it must be counted toward the regular rate.

Shift Differentials

Employees who work night shifts, weekends, or holidays are often paid a shift differential. These payments must be included in the regular rate of pay for overtime purposes.

Shift differentials are commonly and improperly excluded in industries such as healthcare. Under the FLSA, these payments must be included so long as the differential is less than 50% of the employee’s regular rate of pay.

Longevity Pay

Extra pay based on length of service—such as annual longevity bonuses or hourly longevity premiums—must be added to total wages when determining the regular rate of pay.

Payments That May Be Excluded From the Regular Rate

The FLSA allows employers to exclude certain limited categories of compensation when calculating overtime, including:

Genuine gifts

Truly discretionary bonuses

Profit-sharing plans

Thrift or savings plans

Pension or retirement contributions

In addition, employers may exclude premium pay for certain hours worked (such as holidays or weekends) only if the premium equals or exceeds one-and-one-half times the employee’s regular rate for those hours.

These exclusions are narrowly construed, and employers often misapply them.

Special Overtime Rules

Special rules apply to calculating overtime pay owed to salaried employees and tipped employees. Follow the links below to learn more:

Need help? Contact a lawyer at Werman Salas P.C.

Frequently Asked Overtime Pay Law Questions and Answers

Overtime hours means the time an employee works more than 40 hours per work week. Overtime pay is the special premium rate of compensation that employers must pay their employees for working overtime hours. Under federal and state law, overtime pay must equal at least one and one-half times an employee’s regular rate of pay. So, if an employee regularly makes $10/hour, that employee is entitled to make $15/hour for all the overtime hours he or she works.

Unpaid wages can mean (1) a portion of your pay that has been wrongly withheld, (2) pay or wages (including, commissions, bonus and vacation pay) that are owed to you, or (3) a paycheck that your employer never paid you.

All employees are entitled to overtime pay unless they fall into a specific exemption that excludes them from receiving overtime pay. The three largest exemptions include employees in “executive,” “administrative,” and “professional” job positions. Whether you are an exempt employee depends on your specific job duties and responsibilities. If you have questions about your exempt status, you should talk to a lawyer.

You are still entitled to be paid an overtime wage rate for all the overtime hours you work. Agreements that limit your right to overtime pay are unenforceable.

You do not need written records or proof of the number of hours you worked. It is the employer’s duty to maintain certain records regarding your work hours and pay. If your employer does not have those records, your testimony under oath will be sufficient to prove your claim.

No. Overtime pay must only be paid when you work more than 40 hours in a week and not more than eight hours in any one day.

You are potentially entitled to the overtime wages your employer should have paid you, interest and attorney’s fee. You are also potentially entitled to an additional amount of “liquidated damages.” Liquidated damages allow you to double the amount of unpaid overtime wages your employer owes you. For example, let’s say your unpaid overtime wages equal $15,000. If you get liquidated damages, you are entitled to $30,000 ($15,000 x 2).

You are entitled to receive liquidated damages in most instances. You will not be entitled to receive liquidated damages if your employer can prove that it acted in good faith.

The FLSA contains a two-year limitation period. That means you can recover overtime for the two (2) years prior to the date you file your lawsuit. This limitations period can be extended to three (3) years if your employer’s action of not paying you overtime was “willful.”

It depends. Every case is different; however, most lawsuits seeking overtime are settled quickly. That means it can take as little as a few months. However, if the employer vigorously defends the lawsuit, it could take between a few months to a year.

Yes. If you provide us with all the pertinent information, we can quickly calculate the potential damages that you are owed.

You may still be entitled to overtime pay because your employer may be wrongly telling you that you are an independent contractor. Whether or not you are an independent contractor depends on a variety of factors that we will need to discuss with you before we can give you an answer.

Yes. The FLSA applies to federal and state government employees.

No. This is a common method employers use to avoid paying overtime. The averaging of workweeks is expressly prohibited by law. You are entitled to receive overtime pay for each individual week you work more than 40 hours. In the above example, you are entitled to receive overtime pay for the 10 hours you worked more than 40 hours in week two.

Unless you work for the state or federal government, an employer providing compensatory or “comp time” instead of overtime pay is illegal.

Not necessarily. You are exempt based on your job duties and responsibilities and not based on what your employer calls you. It makes no difference if your employer calls you exempt or gives you a job title such as “manager” or “supervisor.” It is a common practice for employers to give workers the title of “assistant manager” to avoid paying overtime when those employees are not exempt and should be paid overtime.

Some job categories are exempt from the overtime requirements. However, these exemptions are narrowly construed against the employer claiming them, and the ultimate burden of proving that the exemption applies rests with the employer. Some jobs falling under the exemption provisions include commissioned sales employees of retail or service establishments, certain computer professionals, employees of motor carriers, such as trucking companies if the employee’s duties include driving or loading vehicles that weigh more than 10,000 pounds, employees of certain seasonal and recreational establishments, farm workers employed on small farms, salesmen, and mechanics employed by automobile dealerships, outside salespersons, executive, administrative, professional or outside sales employees who are paid on a salary basis.

Yes. This is one of the common misconceptions about overtime pay. You are not exempt just because you are paid a weekly salary. If you are not otherwise exempt under the FLSA, your employer must convert your weekly salary to an hourly rate and pay you time and a half for all hours worked in excess of 40 hours. This applies to monthly and semimonthly salaries as well.

To calculate your owed overtime, you must convert your “job rate” to an hourly rate. For example, let’s say you are a cable installer and you get paid $26.00 for each installation that you complete. You work 10 hours per day, five days per week and typically perform 20 installations in your regular work week. In a typical workweek, you make $400.00 ($26.00 x 20 installations) and work 50 hours per week. Therefore, you earn $8.00/hr ($400.00/50). Since your regular rate of pay is $8.00 an hour, your overtime rate is $12.00 (8.00 x 1.5).

The longer you wait, the less overtime pay you may be able to recover. It is also best to promptly pursue your claim so that time records and witnesses are readily available.

No. It is illegal for an employer to fire or in any way retaliate against an employee because he or she has filed a claim for overtime against the employer. We will help protect you if your employer tries to retaliate against you for filing an overtime claim.

You should seek legal advice. The overtime laws are highly technical and we can help apply the law to your special situation. We provide free consultations and will tell you if you are owed earned wages and if we can help you.

In most cases, all costs for overtime and unpaid wage cases will be advanced by our firm. Because our fee is typically contingent on a recovery from the employer, the firm does not get paid or reimbursed for expenses until the recovery is made.

No. We will only receive a fee if we are successful in resolving your claim.

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