Introduction to employment laws in Illinois
Overview
Illinois’ employment landscape is governed by many laws that protect workers’ rights and regulate employer obligations.
As a business with workers in the state, knowledge of Illinois employment laws ensures the smooth running of your operations and helps you avoid potential legal pitfalls. In this guide, we’ll help keep you compliant as you onboard and manage workers in Illinois.
Employing in Illinois: Key employment laws and practices
Standard work hours
In Illinois, full-time employment typically falls between 35 to 40 hours per week.
Contractual or part-time workers’ hours depend on the specific terms of their contracts. These workers often have flexible hours but are still protected under the state’s labor laws.
Self-employed individuals have the flexibility to set their own working hours based on their business needs. Notably, freelancers receive greater protection as compared to other states under the Freelance Worker Protection Act.
Minimum wage and overtime
The state of Illinois sets the minimum wage for private-sector employees at $14 per hour, with a planned increase to $15 per hour in 2025. However, in Chicago, the minimum wage is slightly higher at $16.20.
Under the Fair Labor Standards Act (FLSA), non-exempt employees working more than 40 hours in a week are entitled to overtime pay at 1.5 times their regular pay rate.
Consistent with federal laws, employees earning more than $684 per week and performing executive or managerial duties or working in certified professions like law or accounting are usually exempt from overtime.
Insurance and benefits
Employers in Illinois must provide various insurance and benefits to their employees. This includes health insurance under the provisions of the Affordable Care Act, state-mandated unemployment insurance, and workers’ compensation insurance.
Of note, the Illinois Consumer Coverage Disclosure Act makes a special provision: Employers who offer insurance under an employer-sponsored health plan to employees who work in Illinois must provide a comparison of the benefits offered by the employer with the essential health benefits that must be covered under Get Covered Illinois, the health insurance marketplace for the State of Illinois. Employers must provide this information to employees at the time of hire, each year thereafter, and upon request.
Employers must also comply with the Illinois Secure Choice Savings Program Act, which requires certain employers who do not offer an employer-sponsored retirement plan to facilitate employees’ enrollment in the state-facilitated Roth IRA program.
Benefit type | Employer obligation |
Health insurance | Mandatory at federal level under the provisions of the ACA |
Unemployment insurance | Mandatory |
Workers’ compensation insurance | Mandatory |
Retirement benefits (Secure Choice Savings Program) | Mandatory (for qualifying employers) |
Voluntary employee benefits (e.g., life insurance, disability insurance) | Optional |
Meal and rest periods
According to the Illinois Department of Labor, employees who are scheduled to work seven and a half continuous hours or more are entitled to a 20-minute meal period.
If an employee is scheduled to work 15 hours in one continuous shift, the employer is required to permit the employee to take two 20-minute breaks. It’s a state-specific regulation that differs from federal labor standards which do not mandate paid breaks or meal periods.
However, Illinois law does not stipulate any additional mandates for rest breaks or short breaks throughout the workday. On the other hand, if an employer opts to provide additional rest breaks, it’s essential they adhere to federal guidelines, in which breaks of less than 20 minutes must be compensated.
Employers in Illinois must adhere to the One Day of Rest in Seven Act. Just as it implies, the law mandates that employees get one day of rest for every seven consecutive days they work.
Multiplier makes it easy to manage benefits for Illinois employees.
Anti-discrimination laws
In terms of anti-discrimination laws, Illinois provides greater protections compared to federal law. The Illinois Human Rights Act (IHRA) protects employees from discrimination based on various characteristics, such as age, race, color, religion, sex, national origin, citizenship status, ancestry, military status, sexual orientation, pregnancy, childbirth or related medical conditions, marital status, and disability. It also extends protections to individuals based on their arrest record and housing status.
These extensive categories underscore the commitment of Illinois employment laws toward fostering inclusivity and equality in the workplace.
Employers in Illinois need to ensure that they comprehend these protections thoroughly and implement non-discriminatory policies that align with the IHRA. This includes ensuring fair hiring practices and promoting an inclusive workplace environment free from any form of discrimination.
Leave policies
Illinois boasts leave-related and time-off regulations that surpass federal requirements.
The recently passed Paid Leave for All Workers Act (PLAWA) requires that employers provide at least one hour of paid leave for every 40 hours worked, up to a maximum of 40 hours in a 12-month period.
Private employers in Illinois do not need to provide paid vacation leave, sick leave, or holiday leave. While there’s no mandatory requirement for employers in Illinois to provide paid vacation leave, once an employer opts to offer this benefit, accrued vacation time is considered earned wages and cannot be forfeited at the point of termination.
Parental and Maternity leaves are governed by both federal (Family and Medical Leave Act) and state law (Illinois Family Leave Act). Both laws allow eligible employees to take up to 12 weeks of unpaid leave for childbirth or adoption purposes.
Leave type | State law provisions |
Vacation leave | No mandatory requirement but accrued leave considered earned wages |
Parental/maternity leave | Unpaid leave up to 12 weeks; covered by FMLA and Illinois Family Leave Act |
Bereavement leave | Required by state law |
Jury duty leave | Employers required to provide unpaid leave; employees can’t be penalized for taking leave |
Military Leave | Governed by the federal Uniformed Services Employment and Reemployment Rights Act (USERRA) and the Illinois Service Member Employment and Reemployment Rights Act (ISERRA) |
Termination laws
In Illinois, employment is presumed to be “at-will,” meaning that either employer or employee can terminate the employment relationship at any time for any lawful reason. It is important to adhere strictly to anti-discrimination laws during termination.
While Illinois law does not mandate severance pay upon termination, if an employer has a policy or practice of granting severance pay, it must be applied consistently.
Easily onboard employees in Illinois?
Safety and health
Workplace safety regulations in Illinois largely follow the federal Occupational Safety and Health Act (OSHA). Employers are required to provide a safe workplace free from known health and safety hazards. In case of workplace injuries, employers are obliged to provide workers’ compensation coverage.
Taxes in Illinois
Under Illinois employment laws, both employers and employees have tax obligations. Employers are responsible for withholding federal income tax, Social Security, and Medicare taxes from employees’ wages.
Tax | Details |
Federal income tax | Varies |
State income tax | A flat tax rate of 4.95% |
Social Security | Employer and employee each pay 6.2% of wages up to the annual maximum |
Medicare | Employer and employee each pay 1.45% of all wages |
Unemployment insurance tax | Paid by employer; rates vary based on experience rating |
Managing Illinois employees with an Employer of Record (EOR)
Illinois’ employment laws are significantly different than those of its neighboring states, and that underscores the importance of a thorough understanding of HR compliance for companies planning to hire in the state.
Of course, with Multiplier’s EOR solution, you can legally and compliantly employ full-time workers in Illinois without the hassle of setting up a local entity. Our Payroll platform lets you pay international and U.S. employees and contractors and take care of local taxes, contributions, and withholdings automatically.
Schedule a demo today to see how Multiplier can help streamline your HR and compliance processes.
FAQs
Under regulations set by the Illinois Department of Labor, full-time employment in Illinois is typically between 35 and 40 hours per week. Employees who work beyond 40 hours a week are eligible for overtime pay at 1.5x their regular rate as per the federal Fair Labor Standards Act.
The current minimum wage for private sector employees in Illinois is $14 per hour. However, it’s slightly higher in Chicago. The minimum wage will increase to $15 per hour by 2025.
Under the Illinois Human Rights Act (IHRA), discrimination based on characteristics like sex, age, race, religion, marital status, sexual orientation, or disability is prohibited.
In Illinois, employees in “administrative, executive, or professional” roles must be paid at least once per month. All other employees must be paid at least twice per month. Bonus payments, commissions, and expense reimbursements are generally included in the second payment of the cycle.
The recently passed Paid Leave for All Workers Act (PLAWA) requires that employers provide at least 1 hour of paid leave for every 40 hours worked, up to a maximum of 40 hours in a 12-month period. This leave can be used for any reason, including personal or family reasons.
