Isn't That Rich Podcast

If you’re a small business owner in Illinois, staying informed about new legal updates isn’t just a good idea—it’s essential. With significant changes coming in 2025, small businesses must take action to remain compliant and avoid penalties. To help you navigate these updates, small business lawyer Martin Parsons shared his expert insights. Here's a detailed breakdown of the most important legal changes for 2025.

Minimum Wage Increase

Starting January 1, 2025, Illinois’ minimum wage will increase to $15 per hour. This is the final planned increase in the current legislation. For tipped employees, their pay must also reflect a commensurate increase based on state guidelines.

Why does this matter? Employers need to ensure their payroll systems and policies are updated to reflect the new rates. Failing to comply could result in stiff penalties. If you’re a small business managing payroll yourself, consider using payroll software like Gusto, which automates compliance with wage laws and tracks everything from employee hours to paid leave. It’s worth the investment—especially since errors in payroll can lead to costly fines.

Pay Stub Requirements Expanded

Under the Illinois Wage Payment and Collection Act, pay stubs must now include more detailed information, such as:

• Hours worked
• Rate of pay
• Overtime hours worked and pay
• Gross wages earned
• All deductions and year-to-date totals

Many larger businesses already comply with these rules, but smaller employers—especially those handling payroll manually—may need to adjust. Employers must provide a pay stub for every paycheck, whether it’s direct deposit or a physical check. Remember, Illinois is strict about payroll errors, so even honest mistakes can lead to fines and penalties.

Illinois Human Rights Act Updates

The Illinois Human Rights Act now provides expanded protections for employees, including:

1. Family Responsibilities: Employees can’t be discriminated against for providing personal care to family members such as children, spouses, parents, or grandparents. This includes situations where employees take unpaid time off to care for a loved one.

   • Example: If an employee requests time off to care for an aging parent, employers cannot retaliate by denying promotions, changing their work schedule to something less favorable, or terminating their employment.

2. Reproductive Health Decisions: Employees are now protected from discrimination based on reproductive health choices, such as fertility treatments, contraception, or pregnancy termination. While this may seem like a given, the clarification ensures that personal decisions remain just that—personal.

These updates underscore the importance of fostering an inclusive and supportive workplace. Employers should review their HR policies and employee handbooks to ensure compliance.

Transparency in Job Postings

Illinois is taking job transparency to the next level. Employers with 15 or more employees are now required to include pay scales and benefits in job postings. This applies not only to external job advertisements but also to internal promotions.

The law aims to prevent wasted time for both employers and job seekers. By providing clear salary ranges upfront, businesses attract qualified candidates who are aligned with the compensation offered. This transparency benefits everyone and avoids awkward conversations about pay late in the hiring process.

Noncompliance comes with fines ranging from $500 to $10,000 per violation. To stay compliant, make sure every job posting—whether on LinkedIn, Indeed, or a quick Facebook announcement—includes the required pay and benefit information.

Beneficial Ownership Information (BOI) Reporting to FinCEN

One of the big changes introduced earlier this year was the requirement for businesses to report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). This applies to most limited liability companies (LLCs), corporations, and nonprofits (excluding 501(c)(3) organizations). The idea behind this reporting is to increase transparency and reduce illicit financial activity, such as money laundering.

When we sat down with Martin Parsons to record this episode, the BOI reporting requirement was still active, and business owners were being encouraged to file their reports by the deadlines to avoid significant penalties. At the time, the requirements included:

• Who Must File? Any business created before January 1, 2024, was required to file their BOI with FinCEN by the end of 2024. New businesses established after January 1, 2024, were given 30 days from their registration date to file.
• What Information is Required? Businesses needed to provide information about their "beneficial owners," including:
  • Names
  • Birthdates
  • Residential addresses
  • A copy of a government-issued photo ID (front and back).
• Filing Fees: Filing was free directly through FinCEN, but many third-party services were charging fees to assist with registration. Martin recommended filing directly to save money unless legal assistance was absolutely necessary.

Failure to comply with these requirements carried hefty fines, and businesses were advised to take action to stay compliant.

Update: Federal Court Pauses BOI Reporting Requirement

Since our discussion with Martin, a federal court case has significantly changed the status of the BOI reporting requirement. As of December 3, 2024, the U.S. Department of Treasury has paused the requirement to report Beneficial Ownership Information to FinCEN.

Here’s the official update from the FinCEN website:

"In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports."

What does this mean for your business?

• You’re not required to file BOI reports right now. While the court order is in effect, businesses will not face penalties for failing to file.
• You can still voluntarily file your BOI. If you want to stay ahead of the game and avoid rushing when deadlines are reinstated, voluntary reporting is still an option.
• Monitor the case status. The pause is temporary, and requirements could change quickly once the case is resolved. Keeping a close eye on updates from FinCEN will ensure you don’t miss any new deadlines or requirements.

To stay up-to-date on this and other legal developments impacting small businesses, sign up for the Legal Advocacy Headquarters newsletter at LegalAdvocacyHeadquarters.com.

Get Your Free Resource: The Top 10 Legal Mistakes Entrepreneurs Make

Martin Parsons also offered our readers a free digital copy of his book, The Top 10 Legal Mistakes Entrepreneurs Make In Their Small Businesses. This practical guide is packed with insights to help you avoid common pitfalls and stay legally compliant.

Download your free copy here

Whether you’re just starting out or have been in business for years, this book is an invaluable resource for entrepreneurs who want to protect their businesses and make informed decisions.

Why These Changes Matter

Legal compliance might not be the most glamorous part of running a business, but it’s essential for avoiding fines, building a great workplace culture, and protecting your business. If you’re unsure about any of these updates, now is the time to consult with a lawyer or HR expert to get your policies and procedures in order.

For more resources and to stay informed about legal updates, sign up for the newsletter at Legal Advocacy Headquarters. Being proactive today can save you from big headaches tomorrow!