Employer of Record for Illinois

Guide to Hiring Employees in Illinois

Your guide to hiring employees in Illinois, covering employment and labor laws, payroll, benefits, onboarding and taxes. You can also manage and pay your contractors in Illinois through Playroll.

Famous Photo Of Illinois Landmark
Iconic Image Of Illinois

Capital City

Springfield

Timezone

CST

(

GMT-6

)

Paid Leave

None

Income Tax

4.95%

Employer Tax

13.45%

Leave The hiring to a local expert

Hire in Illinois with ease—our experts handle employment and compliance for you.

Enquire Now

How to Hire Employees In Illinois

Hiring in Illinois for the first time can be challenging, especially with the state's complex employment laws. Whether you're hiring independent contractors, setting up a legal entity, partnering with a PEO, or using an Employer of Record (EOR), it's essential to understand the local employment landscape. Playroll's comprehensive guide is here to help, whether you're onboarding local talent or relocating team members.

Here are four primary ways companies can hire employees in Illinois:

  • Establishing a local entity: Creating a legal entity in Illinois allows for direct hiring, but it can be costly and time-consuming. However, it gives you full control over employment and reduces risk exposure.
  • Partnering with an Employer of Record (EOR): An EOR, like Playroll, takes on the legal responsibilities of employment, acting as the employer on your behalf. This option streamlines hiring, payroll, and compliance with Illinois’s labor laws, helping you hire in Illinois without navigating the complex legal landscape yourself.
  • Working with a Professional Employer Organization (PEO): A PEO, such as Playroll, co-employs your team, managing essential HR functions like payroll, benefits, and compliance. Partnering with a PEO ensures you meet Illinois’s labor regulations while offering competitive employee benefits.
  • Hiring independent contractors: Hiring independent contractors can be more cost-effective, but Illinois has strict contractor classification rules. Proper classification is essential to avoid penalties for misclassification when hiring in Illinois.

Complying with Illinois specific employment regulations and federal laws is critical to avoiding legal risks and costly fines. Our guide focuses on hiring in Illinois, employment compliance, and how Playroll’s services can support your business as you navigate the complexities of hiring in the state.

Good To Know

Access to a highly educated workforce, particularly in finance, healthcare, and technology.

Competitive labor costs compared to other major metropolitan areas.

Strong transportation infrastructure and central location for logistics and supply chains.

State-level incentives for job creation, training, and business investment.

Key Things to Know About Hiring in Illinois

Do I Need an EIN or Payroll Tax Number To Employ in Illinois?

Both a Federal Employer Identification Number (EIN) and an Illinois Payroll Tax Number are needed to employ in Illinois.

Working Hours in Illinois

40 hours per week

What Is Considered Full-Time Employment in Illinois?

In Illinois, full-time employment is typically considered working 30 to 40 hours per week, although the state does not have a legal definition distinguishing full-time from part-time employment.

Probation Period in Illinois

There is no law specifically regulating probationary periods for employees. However, employers commonly use probationary periods as part of their onboarding process to evaluate a new hire's performance.

Labour Laws in Illinois

Minimum Wage in Illinois

Illinois's minimum wage is $14.00 per hour.

Illinois Anti-Discrimination Laws

Illinois enforces comprehensive anti-discrimination laws to protect individuals across various sectors, including employment, housing, public accommodations, and financial credit. The primary legislation governing these protections is the Illinois Human Rights Act (IHRA).

Famous Illinois Landmark

Onboarding New Hires in Illinois

We can help you get your new employee started in Illinois fast, with a minimum onboarding time from just 1-2 working days. Note that the timeline is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Playroll 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. Playroll’s payroll cut-off date is the 10th of the month, unless otherwise specified.

Payroll Taxes For Illinois

In Illinois, most employees are typically paid on a biweekly (every two weeks) or semi-monthly (twice per month) basis, as these are the most common payroll frequencies.

Looking to grow your team in Illinois?

Stay Compliant: Navigate Illinois’s complex labor laws with ease.

Affordable Solution: Reduce costs with a budget-friendly EOR option.

Top-Tier Benefits: Access competitive Illinois and federal employee benefits for a stronger team.

Book a Demo Default Icon Hover Icon

Illinois Employment Taxes

Employer Tax Contributions

Employment Tax Type Tax Rate
Unemployment Insurance (UI) Tax New Employers: 3.95% Established employers: 0.85% to 8.65%
Social Security Tax As per federal legislation
Medicare Tax As per federal legislation
Federal Unemployment Tax Act As per federal legislation
Workers Compensation Insurance Rates vary based on industry classification and the employer's claims history.

Employee Payroll Tax Contribution

Employee Payroll Tax Contribution Tax Rate
Social Security Tax As per federal legislation
Medicare Tax As per federal legislation

Tax Due Dates in Illinois

In Illinois, the deadline for filing individual state income tax returns aligns with the federal deadline, typically on April 15. If April 15 falls on a weekend or federal holiday, the deadline is extended to the next business day.

Pension in Illinois

In Illinois, private-sector employers are not required to provide traditional pensions to employees, but certain regulations encourage retirement savings options:

  • Illinois requires private-sector employers with 5 or more employees to either offer a retirement plan or enroll employees in the Illinois Secure Choice Retirement Program. 
  • Employees are automatically enrolled at a 5% contribution rate but can adjust their contribution or opt out entirely. 
  • Employers only facilitate the payroll deduction; they do not contribute to the employee’s account or manage the funds.

Info Icon

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Illinois tailored to your needs.

CTA Image showing employees in various countries across the globe
Employee Cost Calculator

Get an instant breakdown of the true costs of hiring in Illinois.

Calculate Now Default Icon Hover Icon

Paid and Unpaid Leave Policies in Illinois

Is Vacation Leave Mandatory in Illinois?

Illinois does not require employers to provide paid vacation leave. Vacation leave policies are typically at the discretion of the employer.

What Are Mandatory Leave Entitlements in Illinois?

Type of Leave Time Period Mandatory Pay Status Eligibility Criteria
Paid Leave for All Workers Act 1 hour of paid leave for every 40 hours worked Yes Paid (Full) Based on employer. Employers must provide up to 40 hours of paid leave per year
Family and Medical Leave Act As per federal legislation Yes Unpaid As stipulated by federal FMLA legislation
Sick Leave (Chicago and Cook County) 1 hour of paid sick leave for every 40 hours worked Yes Paid (Full) Employees must work at least 80 hours for an employer within any 120-day period in Chicago or Cook County
Victims’ Economic Security and Safety Act 12 weeks Yes Unpaid Employers with 1+ employees must provide leave for victims of domestic violence, sexual assault, or stalking.
Military Leave As long as active duty is required Yes Unpaid Military service under the Illinois National Guard Employment Rights Law.
Voting Leave 2 hours Yes Paid Employees must request leave before Election Day
School Visitation Leave 8 hours Yes Unpaid Limited to 4 hours per day and requires prior notice
Jury Duty Leave As long as matter is at court Yes Unpaid Employee must be summoned for Jury Duty

Paid Time Off in Illinois

Paid Leave for All Workers Act requires employers to provide employees with up to 40 hours of paid leave per year. Employees earn 1 hour of paid leave for every 40 hours worked. Leave can be used for any reason without requiring documentation.

Maternity Leave In Illinois

In Illinois, maternity leave is governed by both federal and state laws that provide protections for new and expecting parents: 

  • Family and Medical Leave Act: Applies to employers with 50 or more employees within a 75-mile radius. Employees must have worked for the employer for at least 12 months and at least 1,250 hours in the past year. Employees are entitled to up to 12 weeks of unpaid, job-protected leave for the birth and care of a newborn, or for the adoption or foster placement of a child.
  • Illinois Human Rights Act: Employers with one or more employees must provide reasonable accommodations for pregnancy, childbirth, and related conditions, including accommodations for recovery post-birth.
  • Paid Leave for All Workers Act: Provides up to 40 hours of paid leave per year, which can be used for any reason, including maternity-related needs, prenatal appointments, and child bonding.

Paternity Leave In Illinois

In Illinois, paternity leave is not mandated by state law, but employees may be eligible for leave under federal laws and certain state regulations that provide parental leave protections for new fathers. 

  • Family and Medical Leave Act: Provides up to 12 weeks of unpaid, job-protected leave for bonding with a newborn, adopted child, or foster child, available to both mothers and fathers.
  • Paid Leave for All Workers Act: Provides up to 40 hours of paid leave per year to Illinois employees, which can be used for any purpose, including paternity-related needs, such as bonding with a newborn or supporting a partner after childbirth.

Sick Leave In Illinois

Sick leave requirements vary depending on the location and employer policies.

  • Paid Leave for All Workers Act: Illinois will mandate that all employers provide up to 40 hours of paid leave per year, which employees can use for any reason, including illness.
  • Chicago and Cook County Sick Leave Ordinances: Employees accrue 1 hour of paid sick leave for every 40 hours worked, up to a minimum of 40 hours per year. This leave applies to employees who work at least 80 hours within a 120-day period in Chicago or Cook County.
  • Federal Family and Medical Leave Act: Can be utilised for unpaid, job-protected leave for serious health conditions affecting the employee or immediate family members. 

Military Leave in Illinois

Employees are entitled to military leave under both federal and state laws, which provide protections and benefits for employees who serve in the military. The Federal Law (USERRA) provides up to 5 years of unpaid, job-protected leave for military service. Illinois Service Member Employment and Reemployment Rights Act (ISERRA) covers all Illinois employers and provides additional protections similar to those under USERRA.

Jury Duty in Illinois

In Illinois, jury duty is a civic responsibility that ensures the right to a fair trial. Employers are required to provide employees with time off to serve on a jury, regardless of the shift they work.

Parental Leave In Illinois

Parental leave is governed by a combination of federal and state laws, providing various protections and benefits for new parents.

  • Federal Family and Medical Leave Act: Provides unpaid, job-protected leave for the birth and care of a newborn, adoption, or foster care placement.
  • Illinois Human Rights Act: Requires employers to provide reasonable accommodations for pregnancy, childbirth, and related conditions, which may include leave.
  • Illinois Parental Leave for State Employees: State employees are eligible for 10 weeks (50 workdays) of paid parental leave per 12-month period for each pregnancy resulting in births or multiple births.
  • Paid Leave for All Workers Act: Provides up to 40 hours of paid leave per year, accruing at a rate of 1 hour for every 40 hours worked. Leave can be used for any reason, including parental responsibilities, without requiring documentation.

It’s Easy To Manage Benefits For Employees In Illinois With Playroll

Benefit Requirements for Employers in Illinois

In Illinois, employers are mandated to provide certain benefits to employees, ensuring compliance with both state and federal regulations. Key requirements include:

  • Unemployment Insurance
  • Workers' Compensation Insurance
  • Minimum Wage and Overtime
  • Paid Leave
  • Health Insurance
  • Equal Employment Opportunity
  • Meal and Rest Breaks

Are Employers Required To Provide Health Insurance in Illinois?

In Illinois, employers are required to provide health insurance if they meet certain criteria under federal law, specifically the Affordable Care Act (ACA). Employers with 50 or more full-time or full-time-equivalent employees must provide health insurance that meets ACA standards or face potential penalties. Employers with fewer than 50 full-time employees are not required to provide health insurance under federal law.

Do Part-Time Employees Get Benefits in Illinois?

In Illinois, benefits for part-time employees largely depend on the employer's policies and the specific benefit in question, as there is no state requirement for part-time employee benefits.

Are Employers Required To Offer 401k in Illinois?

In Illinois, employers are not required to offer a 401(k) or private retirement plan, but there is a requirement for certain employers to provide a retirement savings option through the Illinois Secure Choice Retirement Program if they do not already offer a plan.

Employment Termination Protocols in Illinois

Termination Process in Illinois

Illinois is an at-will employment state, meaning that employers or employees can end the employment relationship at any time, with or without notice, and for any reason (or no reason at all), as long as it is not illegal. 

It is advisable for employers to document the reason for termination, especially if it is for cause (e.g., performance issues, misconduct), to protect against potential wrongful termination claims.

Notice Period in Illinois

Employers are not legally required to give notice before terminating an employee unless stated in a contract or policy.

Severance in Illinois

Illinois law does not require employers to offer severance pay upon termination. However, if an employer has a policy or contract promising severance, they are obligated to honor it.

Hiring Employees in Illinois with an employer of record

Discuss how an EOR handles onboarding, including setting up compliant employment contracts, registering for taxes, and managing benefits like Illinois's superannuation system (if applicable).

The employer of record is responsible for:

  • Employment Compliance: Ensure all employment contracts comply with Illinois's labor laws and regulations, including proper classification of employees.
  • Payroll Management: Calculate, process, and distribute employee salaries in accordance with Illinois's payroll laws, including deductions for taxes and social security contributions.
  • Tax Filing and Contributions: Handle the registration, filing, and payment of employer taxes and social security contributions to the relevant authorities.
  • Employment Contracts: Draft and maintain compliant employment agreements, detailing salary, benefits, working hours, and termination terms in line with Illinois's legal requirements.
  • Benefits Administration: Provide mandatory employee benefits as required by [State]'s labor laws, such as health insurance, pension contributions, and statutory leave.

Back to Top

Copied to Clipboard

Woman with glasses
Woman with glasses

Take your business to new places

Employer of Record for Illinois

  • hire icon Hire employees without entity setup.
  • handshake icon Full compliance, we assume 100% liability.
  • gift icon Handle local payroll and benefits seamlessly.
  • headphones icon 24/5 responsive real-human support.
  • money icon Transparent pricing, no hidden fees.

FAQS

FAQs About Hiring In Illinois

What is the minimum wage in Illinois?

As of January 1, 2024, Illinois’ minimum wage rates are:

  • $15.00 per hour for most workers.
  • $13.00 per hour for workers under 18, working fewer than 650 hours per year.
  • Applies across all sectors.

Playroll makes growing your team in Illinois effortless. Ready to start?

The HR Platform built to scale your global team.