Illinois small businesses are raising the alarm about a bill posted for the House Labor Committee this week. HB 5367 (Hernandez) would incrementally increase the statewide minimum wage, jumping to $17/hour on July 1, 2026. It would hit $27/hour on Jan. 1, 2032, and then every year afterwards increase with the consumer price index.

“Small business owners are sounding the alarm about the unintended consequences of raising the state’s mandated minimum wage,” said Noah Finley, NFIB Illinois State Director. “Small employers are already managing a variety of rising business costs; the last thing they need is a government-imposed labor cost increase that will only result in fewer jobs and small businesses in the state.”

Small business owners responded to an NFIB survey, noting that HB 5367 would negatively impact their businesses. In their own words:

• “If I have to pay $27 for minimum wage employees, I will have to reduce the number of employees and raise prices in order to keep my business going.”
• “If minimum wage goes much above $15/hour, we will be forced to close our small business. It is unsustainable. We have already been forced to make drastic changes to remain in business at $15/hr.”
• “That will kill small businesses…especially in manufacturing where costs are already very high.”
• “We are a small, locally owned family business. We have 6 employees and struggle to make a profit with our current market. If minimum wage went up to $27/hour, our business would not be able to absorb the additional expense. If this bill passes, we will be liquidating the business, selling the property, and moving to another state.”
• “Increasing to $27 an hour will kill Illinois manufacturing. My products would need to be 80% marked up for the cost to produce goods in Illinois.”
• “I’m a very small business in a small town. It will close my doors even though I offer a service that is becoming harder to find.”

HB 5367 would also phase out the tip credit and increase the minimum wage for employees under the age of 18. If the unemployment rate hits 8.5%, the scheduled minimum wage hike would be suspended. HB 5367 permits uninjured special-interest groups to sue employers for alleged violations. These groups would be eligible to pocket 10% of any civil penalties, plus attorneys’ fees and expenses from employers.