Make employment in Illinois easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Illinois, all in one easy-to-use platform.
As home to Abraham Lincoln, electric blues, and the Chicago Bulls, Illinois is one of the country’s most important exporters of Americana.
The Prairie State is also a hugely important economic hub, with Chicago a global destination for finance, technology, and commerce. With instant access to the breathtaking nature of the Great Lakes, world class museums like the Art Institute of Chicago, and prestigious universities like Northwestern, it’s a highly desirable location for both employees and businesses alike.
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In Illinois, workers’ rights are protected by numerous employment and labour laws, at both the state and federal level. As a result, employees enjoy protection from discrimination based on age, religion, sexual orientation, gender, and race.
Here are the key things you need to know about hiring in Illinois.
In Illinois, the regulations and edicts around working hours and overtime are set by the Illinois Department of Labour.
Full-time employment is generally considered to be between 35 and 40 hours per week.
Under the federal Fair Labour Standards Act, non-exempt employees are entitled to overtime pay of 1.5x their regular pay rate if they work more than 40 hours in a week.
Employees are generally (but not always) exempt from overtime if they:
Earn more than the specified state or federal exemption threshold
Perform a role with duties that are
Work in a certified or licensed profession, such as law, accounting, architecture, or engineering
In Illinois, the salary threshold for exemption is currently $684 per week, which is the federal minimum.
Note that the federal salary threshold for exemption is currently being reviewed in the US.
The minimum state wage for private sector employees is currently $14 per hour, although it is slightly higher in Chicago.
Note that the state minimum will rise to $15 per hour in 2025.
We can help you get your new employee started in Illinois fast. Note that our minimum onboarding time (MOT) is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Remote platform.
For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.
Please note that payroll cut-off dates can impact the actual first day of employment. Remote’s payroll cut-off date is the 10th of the month, unless otherwise specified.
Under state law, 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.
For Remote customers, employee payments are made twice per month in equal installments, payable in arrears. The first payment is made on the 15th of the month and the second payment is made on the final day of the month. If relevant, bonus payments, commissions, and expense reimbursements are included in the second payment of the cycle.
Remote can help you craft a competitive benefits package to attract and retain the best global talent. Our benefits experts understand the trends, requirements, and expectations of the Illinois labour market, allowing your employees to feel appreciated and thrive.
Our benefits packages in Illinois usually include some or all of the following:
Under the federal Affordable Care Act, organisations with a headcount of 50 or more must offer statutory health insurance to their full-time employees.
Many employers also offer some level of supplemental health insurance. While this can lead to a relative rise in employment costs, it’s an essential benefit that ensures your people have access to routine care and are covered in the event of an emergency.
Because Remote is the employer of record (EOR), it’s important for us to offer the same core benefits to all employees to ensure fair and non-discriminatory hiring practices. This protects both your business and ours.
Note that we do not add a markup on any benefits premiums or administration costs.
Yes. Organisations must offer a retirement plan to their employees. You can either choose your own qualified savings plan, or enrol your employees into the state-sponsored Illinois Secure Choice Program.
Note that this only applies to businesses that:
Failure to enrol can result in a fine of $250 per employee for the first year, and $500 per employee for each year thereafter.
Illinois, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Illinois may lead to fines and penalties for the offending company.
Employment taxes and statutory fees affect both your payroll and your employees' paychecks in Illinois. Note that your employees may be liable for additional local taxes.
Employer taxes
0%
Federal unemployment insurance tax (FUTA) (charged on the first $7,000 an employee earns per year)
0.00% to 8.1%
State unemployment insurance tax (SUTA)
0.0%
FICA (Social security)
0.00%
FICA (Medicare)
Employee taxes
0% to 37%
Federal income tax
0.00%
State income tax
0.0%
FICA (Social security)
0.00%
FICA (Medicare)
Under the state’s Paid Leave for All Workers Act, employers must provide up to 40 hours of paid time off (PTO) every 12 months, with employees accruing one hour of paid leave for every 40 hours worked. This law also applies to part-time employees.
Under the state’s Paid Leave for All Workers Act, employers must provide up to 40 hours of PTO — including paid sick leave — every 12 months. Employees accrue one hour of paid leave for every 40 hours worked. This law also applies to part-time employees. Under this act, employees can also take sick leave to care for a close relative. Can an employer deny sick time in Illinois? No. Under the state’s Employee Sick Leave Act, employees are entitled to use their sick leave benefits without any discrimination. Under the federal Family and Medical Leave Act (FMLA), eligible employees are also entitled to up to 12 weeks of unpaid sick leave per year, provided they: Have worked for the same employer for at least 12 months Work in a location where at least 50 people are employed by the company within a 75-mile radius
Under the FMLA, employees are entitled to up to 12 weeks of unpaid maternity or paternity leave. Some organisations opt to pay a reduced salary during this period.
Under the state’s Family Bereavement Leave Act, employees are entitled to up to 10 days of unpaid bereavement leave following the death of a “covered” family member, provided: The company has over 50 employees The employee has worked at least 1,250 hours in the previous 12 months. Under this act, employees can also take up to six weeks’ leave if they experience more than one bereavement in a 12-month period.
Like nearly all US states, Illinois is an “at-will” state. This means both employers and employees can end the employment relationship without reason, provided it is legal.
Remote’s legal experts can help you navigate terminations to ensure employees are only let go fairly, negating any potential legal complications.
Employers and employees are not required to provide notice of termination, unless otherwise stated in the employment contract.
Despite this, it's usually customary for employees to provide two weeks' notice when leaving an organisation.
Employers are not legally required to provide severance pay (unless it is stipulated in the employee's contract or in the company policy).
Employers are also not required to pay any accrued but unused vacation time, unless stipulated in the employment agreement.
There is no requirement to provide a probation period for employees, although many companies implement internal probation policies. These policies typically involve a formal performance evaluation after a specified period, such as three or six months.
Illinois has a diverse economy supported by industries such as manufacturing, finance, healthcare, and agriculture. With a higher minimum wage than the federal requirement and specific payroll tax obligations, Illinois employers must navigate a range of payroll regulations. Understanding these rules ensures compliance and smooth payroll operations.
Employers in Illinois must adhere to both federal and state payroll regulations regarding wages, taxes, and benefits. Below is an overview of key payroll components:
Minimum wage: As of 2024, Illinois’ minimum wage is $14.00 per hour, with scheduled increases reaching $15.00 per hour by 2025.
Overtime rules:
Illinois has a flat state income tax rate of 4.95% for all employees.
Employers must withhold state income tax and remit it to the Illinois Department of Revenue.
Employers must contribute to Illinois’ Unemployment Insurance (UI) program, managed by the Illinois Department of Employment Security (IDES).
The wage base for UI tax in Illinois is $13,590.
Hiring contractors in Illinois can be a strategic and cost-effective way for businesses to complete projects without the obligations of hiring full-time employees. Whether you are engaging independent contractors for specialized services or bringing in subcontractors for labour-intensive projects, understanding Illinois' laws and federal regulations is essential.
Remote helps businesses stay compliant when hiring contractors globally with these key features:
Global compliance support – Ensures adherence to labour laws in 200+ countries with localized contracts and proper documentation.
Misclassification protection – Includes built-in compliance checks and seamless contractor-to-employee conversion.
Centralized documentation – Maintains essential records for audits and automates tax filings (e.g., 1099s for U.S. contractors).
Legal expertise – Provides guidance on complex local labour laws, simplifying international hiring.
Remote’s streamlined approach minimizes compliance risks and simplifies contractor management for businesses.
Remote simplifies contractor payments with:
Our employer of record (EOR) service enables you to hire, manage, and pay top talent in Illinois with speed and simplicity.
Remote’s EOR allows your company to legally hire employees in any country or US state — including Illinois — wherever your business is based, without having to set up a local legal entity.
On paper, Remote is the official employer, and we handle compliance, payroll, benefits (including equity), and other HR processes — but you maintain full control over the hire’s day-to-day management and work responsibilities. Learn more.
An EOR may be ideal if your company:
Needs to hire employees in Illinois but doesn’t want to establish a legal entity there
Is testing local markets before committing to a full business expansion
Wants to ensure full compliance with federal, state, and local employment laws and tax requirements
Needs a fast, cost-effective way to onboard employees in the state
Needs a temporary hiring solution before establishing a legal entity
Illinois combines a central US location with a highly skilled workforce and a strong economy led by industries like finance, manufacturing, and healthcare. Whether you’re a startup expanding across the midwest or an SMB ready to build a distributed team, managing HR, payroll, and compliance across state lines can quickly become overwhelming. That’s where a professional employer organisation (PEO) can help.
A professional employer organisation (PEO) is a third-party provider that helps businesses handle key HR functions. These typically include payroll, benefits administration, tax filings, and employment law compliance. With a PEO, your business enters into a co-employment relationship, meaning the PEO takes on the administrative and legal tasks related to employment — while you retain full control over day-to-day management of your team.
For small to midsize companies, a PEO can provide enterprise-grade HR services without the cost or complexity of building an in-house department.
As mentioned, a PEO operates through a co-employment model, which requires your company to be registered and operating in Illinois.
In contrast, an employer of record (EOR) acts as the legal employer on your behalf. EORs are typically used for hiring in states (or countries) where your business doesn’t yet have a legal presence. If you’re hiring your first employee in Illinois and don’t yet have an entity or tax setup, an EOR may be a better fit initially.
Working with a PEO in Illinois offers several advantages, such as:
CA$39
per employee/month
Robust, transparent global payroll
A straightforward self-service platform
Dedicated specialists offering personalised support
Meet local payroll regulations across all countries
Unified benefits management
Comes with HR Core included as standard
CA$39
per contractor/month
Pay only for contractors you actively engage with
Collaborate with contractors worldwide
Draft, update, and sign tailored, localised contracts
Authorise contractor invoices with one click or auto-pay
Transparent payments providing complete visibility
Comes with HR Core as standard
CA$945
Per employee/month
Employ staff in 90+ countries without setting up a local entity
Onboard with support from a dedicated specialist
Local payroll processed and paid on schedule, every time
Compliance safeguards integrated by default
Localised, flexible benefits that remain competitive
In-house experts dedicated to local support
HR Essentials included as standard
Employees must report for jury duty if summoned (unless exempt). Jurors are typically “on call” for two weeks. Do employers have to pay for jury duty in Illinois? No. Private sector employers are not required to pay employees on jury service, but they must provide unpaid leave, and cannot penalize or terminate an employee on jury duty. Some employers provide paid leave.
Under federal law, employers must grant leave to employees who are members of the military or the National Guard for military duty or training. These employees have the right to take time off for their military obligations, and employers are prohibited from discriminating against them based on their military service.
UI tax rates vary based on an employer’s experience rating and range from 0.2% to 7.6%.
Illinois law requires all employers to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
Employers must register for an Illinois Withholding Tax Account Number with the Illinois Department of Revenue.
State withholding tax returns must be filed monthly, quarterly, or annually, depending on employer classification.
UI tax reports must be submitted quarterly to the Illinois Department of Employment Security.
Payroll tax payments can be made electronically through MyTax Illinois.
Higher state minimum wage: Illinois has a higher minimum wage than the federal requirement.
Final paycheck rules:
New hire reporting: Employers must report new hires to the Illinois New Hire Reporting Center within 20 days.
Paid sick leave: Illinois does not mandate paid sick leave at the state level, but local ordinances, such as those in Chicago and Cook County, require paid sick leave.
Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
Right-to-work status: Illinois is not a right-to-work state, meaning employees may be required to join a union if applicable.
Managing payroll in Illinois requires careful attention to state-specific regulations, including minimum wage compliance, UI tax requirements, and workers’ compensation laws. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.
To see just how easy global payroll can be, book a demo today.
Global coverage – Payments in 200+ countries, multiple payment methods, and currency flexibility.
Cost and compliance – Fair price guarantee (pay only for active contractors), built-in compliance with regional regulations, and localized contracts.
Learn more about how Remote simplifies contractor management in Illinois —get started for free today.
Key benefits of hiring through our EOR in Illinois include:
Faster market entry . You can hire talent quickly, without having to wait months to establish a local entity.
Full compliance with local employment laws . Avoid the legal risks associated with non-compliance and misclassification.
Simplified payroll management . We automate payroll tax calculations and ensure you are fully compliant with all federal, state, and local withholding obligations, even when laws change.
Lower costs. Setting up a legal entity in Illinois can be costly and time-consuming. An EOR eliminates the need for entity registration, reducing overhead expenses.
Fewer resources required. With HR, payroll, and compliance managed by the EOR, your company can concentrate on scaling operations and assigning your resources elsewhere.
It’s also crucial to note that, at Remote, we own all our own legal entities. As a result, we don’t need to rely on third parties, which can incur delays and extra costs, and result in a negative employee experience. All our EOR services — including the dedicated support of our local specialists — are provided in-house.
To learn more — and to see our EOR platform in action — book a demo with one of our friendly experts today.
Compliance with state employment laws and tax regulations
Access to affordable, competitive employee benefits packages
Reduced administrative burden around payroll and HR documentation
Simplified onboarding, performance tracking, and employee offboarding
Minimized risk around misclassification, workplace policies, and employee relations
Illinois employers must also navigate unique state laws, including workers’ compensation requirements and specific tax obligations. Remote’s PEO helps you stay compliant while keeping your HR operations lean and efficient.
To partner with a PEO in Illinois, your business must have a registered legal entity in the state. Once that’s in place, our PEO service takes on your HR administration tasks such as running payroll, administering benefits, and filing local and federal taxes.
Remote’s PEO services integrate seamlessly into your operations, whether you're hiring your fifth employee or your 50th. You maintain full control over how your team works while we handle the operational complexities behind the scenes.
If your company is legally established in Illinois and you're looking for a scalable way to manage HR, a PEO is an ideal solution. You’ll gain access to expert support, reduce your compliance risk, and free up time to focus on growth.
If you're just entering Illinois and don’t yet have a legal entity, consider starting with an EOR and transitioning to a PEO as you scale.
Remote makes it easy to manage HR, payroll, and compliance across all 50 states. Learn more about our PEO services and how we can support your team’s growth in Illinois.