Illinois
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.
- Capital City
Springfield
- Currency
United States Dollar ($, USD)
- Population size
127,000,000
Facts & Stats
- Capital City
Springfield
- Currency
United States Dollar ($, USD)
- Population size
127,000,000
- VAT - standard rate
6% (Higher in some municipalities)
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.
Grow your team in Illinois with Remote
If you want to hire in Illinois, you’ll need to own a legal entity there — or partner with a global employment solutions provider, like Remote.
We can employ top talent in Illinois on your behalf and manage complex HR tasks such as onboarding, payroll, benefits, and taxes. You can also manage and pay your contractors in Illinois through Remote.
Risks of misclassification
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.
Employing in Illinois
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.
Hours of work in Illinois
In Illinois, the regulations and edicts around working hours and overtime are set by the Illinois Department of Labour.
What is considered full-time employment in Illinois?
Full-time employment is generally considered to be between 35 and 40 hours per week.
Do pay employees get overtime in Illinois?
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 considered executive or managerial
Work in a certified or licensed profession, such as law, accounting, architecture, or engineering
In Illinois, the pay threshold for exemption is currently $684 per week, which is the federal minimum.
Note that the federal pay threshold for exemption is currently being reviewed in the US.
Minimum wage in Illinois
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.
Onboarding timeline in Illinois
We can help you get your new employee started in Illinois fast, with a minimum onboarding time (MOT) of just 2 working days. Note that the 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.
Payroll cycle in Illinois
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 instalments, 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.
Competitive benefits package in Illinois
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:
Pension or 401(K)
Medical Insurance
Vision Insurance
Health Saving Plan (HSA)
Long term disability insurance (LTD)
Dental Insurance
Life Insurance
Flexible Spending Account (FSA)
Are employers required to provide health insurance in Illinois?
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.
Are employers required to offer 401k in Illinois?
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:
Have at least five employees
Have been registered as a business for at least two years
Do not already offer a qualified savings plan
Failure to enrol can result in a fine of $250 per employee for the first year, and $500 per employee for each year thereafter.
Taxes in Illinois
Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Illinois.
Employer taxes
Employment Tax | |
|---|---|
6% | Federal unemployment insurance tax (FUTA) (charged on the first $7,000 an employee earns per year) |
0.03% to 8.1% | State unemployment insurance tax (SUTA) |
6.2% | FICA (Social security) |
1.45% | FICA (Medicare) |
Employee taxes
Payroll Tax | |
|---|---|
10% to 37% | Federal income tax |
4.95% | State income tax |
6.2% | FICA (Social security) |
1.45% | FICA (Medicare) |
Types of leave
Types of leave in Illinois
Holiday | 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. |
Sick leave | 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 |
Parental and maternity leave | Under the FMLA, employees are entitled to up to 12 weeks of unpaid maternity or paternity leave. Some organisations opt to pay a reduced pay during this period. |
Bereavement leave | 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. |
Jury duty | 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 penalise or terminate an employee on jury duty. Some employers provide paid leave. |
Military 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. |
Employment termination
Termination process
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.
Notice periods
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.
Severance pay
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 holiday time, unless stipulated in the employment agreement.
Probation periods
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.