Illinois Overtime Laws: The 40 Hour Rule, Chicago’s Extra Rules, and Why Illinois Still Taxes Overtime

Illinois overtime law starts with the same rule as federal law: time and a half for every hour over 40 in a workweek, and nothing extra for a long day. Most of what makes Illinois different sits around that rule. The state minimum wage is $15.00, Chicago’s is $17.05, employers can require overtime only within the limits of the One Day Rest in Seven Act, and an employee who is underpaid can recover three times the shortfall plus 5% a month.

This guide covers the overtime laws in Illinois for 2026, with worked examples at state and Chicago wages and the rules on mandatory overtime. It also answers a question many Illinois workers now search for, which is whether the new federal overtime deduction lowers their state tax. Every figure links to the statute or agency behind it.

Illinois overtime law: the short answer

The rule is in Section 4a of the Illinois Minimum Wage Law (820 ILCS 105). In the words of the Illinois Department of Labor (IDOL), an employee is “entitled to pay at time and one-half your regular rate of pay if you worked over 40 hours in a workweek.”

Is overtime after 8 hours or 40 hours in Illinois?

After 40 hours in a workweek. Illinois has no daily overtime, so a 12 hour shift in a 36 hour week earns straight pay. The workweek is a fixed period of 7 consecutive days that the employer sets, and hours cannot be averaged across two weeks.

Comp time is not an option either. IDOL states that “compensatory time off in place of payment for overtime is not legal in the private sector.”

How to calculate overtime pay in Illinois

Overtime pay is 1.5 times the regular rate for each hour over 40. The regular rate includes the hourly wage plus nondiscretionary pay such as production bonuses and shift differentials. The examples below use 2026 wages; our overtime calculator handles other numbers.

Example 1: hourly employee

A warehouse worker in Joliet earns $18.00 an hour and works 46 hours.

Example 2: tipped employee, state and Chicago

Illinois lets employers count tips toward up to 40% of the minimum wage, so the lowest cash wage for a tipped worker is $9.00 statewide. Overtime is figured on the full minimum wage, and the same tip credit is subtracted once. In Chicago, the tipped wage is $12.96 for employers with 4 or more employees.

Tips must still bring each hour up to the full overtime rate. Chicago’s tip credit is being phased out on a set schedule, so check the city’s current rate each July.

Example 3: weekly production bonus

A machine operator earns $20.00 an hour, works 45 hours, and receives a $90 production bonus for the week. The bonus is part of the regular rate.

Paying overtime on the $20.00 base alone would come to $1,040.00 and leave a $5.00 gap every week. Small gaps like this add up, because the Illinois penalties apply to every dollar of the shortfall.

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Who is exempt from overtime pay in Illinois

The Illinois list is short and mostly mirrors federal law. According to the IDOL overtime FAQ, the main exemptions are:

• Executive, administrative, and professional employees as defined by the Fair Labor Standards Act.
• Salespeople and mechanics who sell or service cars, trucks, or farm implements at dealerships.
• Agricultural workers.
• Commissioned employees covered by Section 7(i) of the FLSA.
• Some radio and television employees in cities with fewer than 100,000 people.
• Employees who exchange hours under a workplace exchange agreement.
• Employees of certain educational or residential child care institutions.

Illinois overtime law for salaried employees

On salaries, IDOL says: “An employee being paid on a salary basis is not automatically exempt from receiving overtime pay.” Because Illinois adopts the federal definitions, an exempt executive, administrator, or professional must earn at least $684 a week, or $35,568 a year, and their main duties must fit the exemption (US Department of Labor). The Department of Labor confirmed that level in May 2026, when it restored the regulations after a 2024 rule was struck down. Guides still quoting $455 a week are out of date.

A salaried employee who fails either test is non exempt. Their regular rate is the weekly salary divided by the hours it is meant to cover, and every hour over 40 is paid at 1.5 times that rate. Our article on overtime for salaried employees shows the calculation.

Is mandatory overtime legal in Illinois?

For most workers, yes. IDOL’s answer to whether an employer can require overtime is: “Yes, unless such work would violate the One Day Rest in Seven Act.” That law, known as ODRISA, sets the main limits:

• A day of rest. Employees get at least 24 hours of rest in every 7 consecutive days. An employer can ask IDOL to relax this for employees who volunteer to work a seventh day, and must show they are in fact volunteers (IDOL, ODRISA FAQ).
• Meal breaks. A meal period of at least 20 minutes for every 7.5 hour shift, starting no later than 5 hours into the shift, plus another 20 minutes for every additional 4.5 continuous hours (IDOL, ODRISA). An employee who works through a meal break must be paid for it.

Hospital nurses have a separate rule. Under the Hospital Licensing Act, 210 ILCS 85/10.9, “No nurse may be required to work mandated overtime except in the case of an unforeseen emergent circumstance when such overtime is required only as a last resort.” Even then it “shall not exceed 4 hours beyond an agreed-to, predetermined work shift,” and a nurse who works up to 12 consecutive hours must get at least 8 consecutive hours off. Short staffing does not count as an emergency, and a hospital cannot discipline a nurse for refusing mandated overtime. Bills to extend similar limits to other hospital workers have been introduced in the General Assembly, so check their status before relying on them.

Chicago overtime laws and Fair Workweek

Chicago uses the state’s 40 hour overtime rule, but two city ordinances change the numbers and add a premium.

First, the minimum wage. From July 1, 2026, Chicago employers with 4 or more employees must pay at least $17.05 an hour, and $12.96 to tipped workers (City of Chicago). That puts the lowest Chicago overtime rate at $25.58.

Second, the Fair Workweek ordinance. It covers building services, healthcare, hotels, manufacturing, restaurants, retail, and warehouse services employers with at least 100 employees worldwide (250 employees and 30 locations for restaurants), and employees earning up to $33.85 an hour or $64,945.55 a year in 2026. Covered employees get:

• Advance notice of their schedules, and 1 hour of predictability pay for changes made within 14 days.
• A right to decline hours that start less than 10 hours after the previous day’s shift ended. If they agree to work them, the city’s Fair Workweek FAQ says those hours must be paid at 1.25 times the base rate.

A retail associate earning $18.00 who closes at 11:00 pm and opens at 7:00 am works 2 hours inside the 10 hour window, which adds 2 x $4.50 = $9.00 to that day’s pay, even in a week under 40 hours.

Is overtime taxed in Illinois?

Yes, in full. There is no Illinois version of no tax on overtime. Federal law now lets workers deduct qualified overtime compensation for tax years 2025 through 2028: the “half” in time and a half that the FLSA requires, up to $12,500 a year, or $25,000 for joint filers (IRS). That deduction does not reduce Illinois tax.

It comes down to how the forms work. The Illinois return starts from federal adjusted gross income, and the federal overtime deduction is taken after that figure is set. The Illinois CPA Society explains that the “no tax on overtime” provision is a “below the line” deduction that does not affect adjusted gross income (ICPAS). The Department of Revenue’s 2025 Schedule M instructions, which list the subtractions Illinois allows, include no subtraction for overtime.

This reflects the 2025 forms. The General Assembly could change it, so check the Department of Revenue’s current instructions before filing, or ask a tax adviser.

Unpaid overtime: treble damages and wage claims

Illinois remedies are steep. Under 820 ILCS 105/12, an underpaid employee “may recover in a civil action treble the amount of any such underpayments,” plus costs, attorney’s fees, and “damages of 5% of the amount of any such underpayments for each month” they remain unpaid. A lawsuit must be filed within 3 years.

The other route is a wage claim with IDOL, which handles unpaid overtime among other wages. When the Director of Labor brings the case, the employer owes the unpaid amount plus an equal amount in damages, a penalty of up to 20% for willful or repeated violations, and an extra $1,500 penalty, and that action can be brought within 5 years.

To see how fast this adds up, take the $5.00 weekly gap from Example 3. Over a year, that is $260. Trebled, it is $780 before the monthly 5% damages and fees, for one employee. For employers, accurate records of hours and pay components are the cheapest protection, and our guide to employee timekeeping covers what to keep.

Tracking overtime with actiTIME

Illinois rules turn on weekly hours, meal periods, and days of rest, and Chicago adds the gap between shifts. In actiTIME, employees log time against tasks in a weekly timesheet or as start and stop times in Calendar View, and managers approve each week before payroll.

• Overtime Registration calculates overtime automatically for each user, or lets employees enter it manually, depending on the setting you choose for them.
• The Time Balance and Overtime Report compares worked time with scheduled hours across the team.
• Calendar View keeps the start and end of each time card, which shows consecutive workdays and the rest time between shifts.
• Set an overtime rate in each user’s profile, and overtime costs appear in the Cost of Work Report by project and customer.
• Approved weeks can be locked, so hours that went to payroll cannot be changed afterward.

FAQ

What are the overtime laws in Illinois for 2026?

Time and a half after 40 hours a week, with a $15.00 state minimum wage and $17.05 in Chicago. Exempt salaried staff must earn at least $684 a week under the federal test. Underpaid employees can recover triple the shortfall plus 5% a month.

Does Illinois allow mandatory overtime?

Yes, for most employees, as long as they get 24 hours of rest in every 7 consecutive days and their meal breaks. Hospital nurses can be mandated only in an unforeseen emergency, as a last resort, and for no more than 4 hours beyond their shift.

How many breaks are in an 8 hour shift in Illinois?

One meal period of at least 20 minutes, starting no later than 5 hours into the shift, under ODRISA. A second 20 minute meal period is required once a shift runs 12 hours or longer.

Can I refuse overtime in Illinois?

Because Illinois lets employers require overtime within the ODRISA limits, refusing it may lead to discipline unless a contract or union agreement says otherwise. A hospital nurse cannot be disciplined for refusing mandated overtime that the law prohibits.

Does Illinois require double time?

No. Illinois requires time and a half after 40 hours. Double time comes only from a contract, union agreement, or company policy.

Count the week, the breaks, and the rest days

The 40 hour rule in Illinois overtime laws is simple. The rules around it are stricter. The regular rate has to include bonuses, ODRISA sets rest and meal limits on mandatory overtime, and Chicago adds its own wage floor and rest premium. With triple damages and 5% a month on any shortfall, a small payroll error gets expensive, so the records count as much as the rate.

To see how that works with your team, start a free trial of actiTIME. It runs for 30 days with every feature included, and afterward you can keep the permanent free version for teams of up to 3 users.