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State snapshot

Key considerations Which issues would you most highlight to someone new to your state?

Illinois law provides sweeping protections for pregnant workers. A 2014 amendment to the Illinois Human Rights Act specifically requires employers to give pregnant workers leave as a reasonable accommodation. Additionally, unlike under the Americans with Disabilities Act, employers do not have the discretion to force an employee to accept a particular accommodation. Further, unlike federal law, Illinois law specifically outlaws discrimination and harassment on the basis of sexual orientation.

Additionally, effective as of July 1 2017, the City of Chicago and Cook County enacted ordinances which require covered employers to provide eligible employees with up to 40 hours of paid sick leave in each 12-month period of their employment. Although nearly 80% of Cook County municipalities have opted out of the Cook County Earned Sick Leave Ordinance, the requirements of both the Chicago and Cook County ordinances are quite onerous and are very employee friendly. In addition, the State of Illinois has recently enacted the Illinois Employee Sick Leave Act (effective January 1 2017), which requires Illinois employers which provide personal sick leave benefits to their employees to allow employees to take such leave for absences due to the illness, injury, or medical appointments of the employee’s child, spouse, domestic partner, sibling, parent, mother-in-law, father-in-law, grandchild, grandparent, or stepparent.

What do you consider unique to those doing business in your state?

Illinois has strong wage payment protections, including a 10-year statute of limitations under the Illinois Wage Payment and Collection Act.

Is there any general advice you would give in the labor/employment area?

With respect to employee classification, employers should be aware that it is more difficult for Illinois employees to meet the exemption status under the executive, administrative and professional exemptions. Thus, employees may be entitled to the exemption under federal law, but not Illinois state law.

Emerging issues What are the emerging trends in employment law in your state, including the interplay with other areas of law, such as firearms legislation, legalization of marijuana and privacy?

In July 2013 Illinois became the last state in the United States to allow its citizens to carry a concealed firearm when it passed the Illinois Concealed Carry Act. Additionally, the Compassionate Use of Medical Cannabis Pilot Program Act took effect on January 1 2014, and allows physicians to recommend the therapeutic use of medical marijuana to patients under their care for qualifying medical conditions. However, nothing in the act prohibits employers from:

  • adopting reasonable regulations concerning the consumption, storage or timekeeping requirements related to the use of medical marijuana;
  • enforcing a policy concerning drug testing, or zero-tolerance or drug-free workplace policies, provided they are applied in a non-discriminatory manner;
  • disciplining a registered qualifying patient for violating a workplace drug policy; or
  • disciplining an employee for failing a drug test if failure to do so would put the employer in violation of federal law or cause it to lose a federal contract or funding.

Proposals for reform Are there any noteworthy proposals for reform in your state?

There are a number of employee-friendly legislative proposals in Illinois, including proposals for state-wide paid sick leave benefits and to increase the state’s minimum wage. However, few, if any, of those proposals are likely to be passed into law, either as a result of having too few votes in the state legislature, or because they are nearly certain to be vetoed by Governor Bruce Rauner. As in past years, pension reform continues to be a big topic of discussion in Illinois, particularly in the larger context of ongoing state budget discussions.

Employment relationship

State-specific laws What state-specific laws govern the employment relationship?

A number of state-specific laws govern the employment relationship in Illinois, including:

  • the Illinois Human Rights Act;
  • the Illinois Minimum Wage Law;
  • the Prevailing Wage Act;
  • the Personnel Record Review Act;
  • the Victim’s Economic Security and Safety Act;
  • the Employee Credit Privacy Act;
  • the Job Opportunities for Qualified Applicants Act (“Ban the Box Act”);
  • the One Day Rest in Seven Act;
  • the Genetic Information Privacy Act;
  • the Illinois Employee Sick Leave Act;
  • the Illinois Freedom to Work Act;
  • the Illinois Child Bereavement Leave Act; and
  • the Equal Pay Act.

Who do these cover, including categories of workers?

The answer to this question depends largely on the particular law. For example, the Illinois Human Rights Act applies to “[a]ny individual performing services for remuneration within this State for an employer,” as well as apprentices and applicants for apprentices. The act also protects unpaid interns from sexual harassment. In comparison, both the Illinois Credit Privacy Act and the Ban the Box Act apply to both applicants and employees.

Misclassification Are there state-specific rules regarding employee/contractor misclassification?

The Illinois Department of Labor takes the position that:

“[s]ervice performed by an individual for an employing unit, whether or not such individual employs others in connection with the performance of such services, shall be deemed to be employment unless and until it is proven in any proceeding where such issue is involved that: (1) such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact; (2) such service is either outside the usual course of the business for which such service is performed of that such service is performed outside of all the places of business of the enterprise for which such service is performed; and (3) such individual is engaged in an independently established trade, occupation, profession, or business.” 

Additionally, the Illinois Employee Classification Act provides special rules for the classification of workers in the construction industry.

Contracts Must an employment contract be in writing?

No. However, with respect to certain pay practices (e.g., the payment of severance or reimbursement for expenses), an employer’s past practices can be instructive or binding.

Are any terms implied into employment contracts?

No.

Are mandatory arbitration agreements enforceable?

Yes, subject to general principles of contract formation.

How can employers make changes to existing employment agreements?

Changes to existing employment agreements should preferably be made in writing, signed and dated by both parties. Depending on the nature of the agreement, additional consideration may be required (e.g., for new non-compete agreements or restrictive covenants).

Hiring

Advertising What are the requirements relating to advertising open positions?

There are no specific requirements under Illinois law. 

Background checks What can employers do with regard to background checks and inquiries?

(a) Criminal records and arrests

The Job Opportunities for Qualified Applicants Act (“Ban the Box Act”) prohibits most Illinois employers from considering or inquiring into a job applicant’s criminal record or history until after the individual has been determined qualified for the position and notified of an impending interview or, if the applicant will not be interviewed, until after a conditional offer of employment is made. The act does not preclude an employer from notifying applicants in writing of specific offenses that will disqualify an applicant from employment in a particular position due to federal or state law or the employer’s policy. Additionally, Illinois employers are prohibited from discriminating against applicants or employees on the basis of their arrest records.

(b) Medical history

The Genetic Information Privacy Act prohibits employers from seeking or using genetic information for personnel-related reasons. The Illinois law is similar to the federal Genetic Information Non-discrimination Act, except that the Genetic Information Privacy Act is more expansive and covers employers with at least one employee. Additionally, the AIDS Confidentiality Act provides that no person may order an HIV test without first obtaining the documented informed consent of the subject of the test or the subject’s legally authorized representative.

(c) Drug screening

Illinois has no statute relating to drug testing. However, the Illinois Human Rights Act explicitly states that it is not illegal for employers to require drug tests of employees who have or are in a drug rehabilitation program.

(d) Credit checks

The Illinois Credit Privacy Act prohibits covered employers from inquiring about an applicant or employee’s credit history or obtaining a copy of his or her credit report. However, employers may inquire about an employee or applicant’s credit history for a position in which credit history is a “bona fide occupational qualification,” as defined in the act.

(e) Immigration status

Although there are no explicit protections under Illinois law based on immigration status, the Illinois Human Rights Act, Cook County Human Rights Ordinance and Chicago Human Rights Ordinance all prohibit discrimination on the basis of national origin.

(f) Social media

The Illinois Right to Privacy in the Workplace Act allows employers to access employees’ professional social media accounts. However, the act generally prohibits employers from requesting that any employee or prospective employee provide a password or other account information to enable the employer to gain access to an employee’s personal social networking accounts.

(g) Other

N/A.

Wage and hour

Pay What are the main sources of wage and hour laws in your state?

The Illinois Minimum Wage Law, the Equal Pay Act, the Prevailing Wage Act, the One Day Rest in Seven Act, and the Chicago Minimum Wage Law are the primary wage and hour laws in Illinois.

What is the minimum hourly wage?

The minimum wage in Illinois is $8.25 per hour. Effective as of July 1, 2017, the minimum wage in the City of Chicago is $11.00 per hour. The Chicago minimum wage will increase to $12 per hour effective from July 1, 2018, and will continue to rise each year thereafter. Effective as of July 1 2017, the minimum wage in Cook County is $10 per hour. The Cook County minimum wage will increase to $11 per hour effective as of July 1 2018, and will continue to rise each year thereafter.

What are the rules applicable to final pay and deductions from wages?

Final payment of wages must occur at the time of separation, if possible, but no later than the next regularly scheduled payday. Further, expenses incurred related to services performed for the employer should be included in the final compensation paid to a separated employee. Whenever a policy provides for paid vacation earned by length of service, vacation time is earned pro rata as the employee renders service to the employer, and accrued but unused vacation must be paid out on separation. Paid time off that can be used for any purpose is treated the same as vacation time to be paid at termination to the extent accrued and unused.

With respect to bonus payments, an employee has a right to an earned bonus when there is an:

“unequivocal promise by the employer and the employee has performed the requirement set forth in the bonus agreement between the parties and all of the required conditions for receiving the bonus set forth in the bonus agreement have been met.” 

Unless one of the conditions for the bonus is that the employee be on the payroll at the time of the bonus payout, the bonus is due and owing to the employee at the time of separation. Similarly, a separated employee has a right to an earned commissions at the time of separation, notwithstanding the fact that, due to the employee’s separation from employment, the sale or other transaction was consummated by the principal personally or through another agent.

Hours and overtime What are the requirements for meal and rest breaks?

Employees who work for seven and a half continuous hours or longer must be “permit[ted] at least a 20-minute meal break beginning no later than 5 hours after the start of work.” This requirement applies to virtually all employees, including exempt employees; the only exceptions are for employees who monitor persons with developmental disabilities and employees whose meal periods are fixed by a collective bargaining agreement. No other rest or meal breaks are required under Illinois law.

What are the maximum hour rules?

The Illinois One Day Rest in Seven Act requires employers to give employees at least 24 consecutive hours of rest in every calendar week. A calendar week is defined as seven consecutive 24-hour periods starting at 12:01 a.m. Sunday morning and ending at midnight the following Saturday. There are various exceptions to this rule, including for exempt employees and for employees required to work under emergency conditions.

How should overtime be calculated?

Overtime is calculated as one and one half times the employee’s regular rate of pay for any hours worked in excess of 40 in a working week.

What exemptions are there from overtime?

Illinois recognizes the executive, administrative and professional exemptions to its overtime law. However, the requirements to meet the exemptions under Illinois law are more onerous than the requirements to meet the exemptions under the federal Fair Labor Standards Act.

Record keeping What payroll and payment records must be maintained?

Under the Equal Pay Act, employers must preserve records documenting the name, address, and wages paid to each employee for a period of not less than five years, or longer if the employer is the subject of an investigation by the Department of Labor. Additionally, regardless of an employee’s status as an exempt administrative employee, executive or professional, every employer must keep for at least three years accurate records of:

  • the name and address of each employee;
  • the hours worked each day in each working week by each employee;
  • the rate of pay;
  • the amount paid each pay period to each employee; and
  • all deductions made from wages or final compensation. 

An employer that provides paid vacation to its employees must maintain records for no less than three years of the number of vacation days earned for each year and the dates on which such vacation days were taken and paid.

Similarly, employers which are subject to the Cook County Earned Sick Leave Ordinance are required to have personnel and payroll records that are sufficient to demonstrate:

  • each covered employee’s name;
  • each covered employee’s contact information, including mailing address, telephone number and/or email address;
  • each covered employee’s occupation or job title;
  • each covered employee’s hire date;
  • the number of hours that each covered employee worked each working week or pay period;
  • the number of earned sick leave each covered employee was awarded;
  • the number of hours of earned sick leave each covered employee used; and
  • the date on which each covered employee used earned sick leave. 

The Cook County Earned Sick Leave Ordinance requires that these records be retained for at least three years.

Employers which are subject to the Chicago Paid Sick Leave Ordinance are required to maintain personnel and payroll records that are sufficient to demonstrate:

  • name of each covered employee;
  • mailing address, telephone number, and email address of each covered employee;
  • occupation and job title of each covered employee;
  • hire date of each covered employee;
  • date each covered employee was eligible to use paid sick leave;
  • number of hours of paid sick leave accrued by or awarded to each covered employee;
  • dates and number of hours each covered employee used paid sick leave;
  • rates of pay of each covered employee;
  • hours worked each date and each working week by each covered employee;
  • type of payment (e.g., hourly rate, salary, commission), straight-time and overtime pay, and total wages paid to each covered employee in each pay period;
  • addictions and deductions from each covered employee’s wages for each pay period and an explanation of additions and deductions; and
  • dates of payment of each period covered by each wage payment to each covered employee.

The Chicago Paid Sick Leave Ordinance requires that these records be retained for at least five years.

Discrimination, harassment and family leave

What is the state law in relation to:

Protected categories

(a) Age?

Age is a protected classification under the Illinois Human Rights Act, the Cook County Human Rights Ordinance and the Chicago Human Rights Ordinance.

(b) Race?

Race is a protected classification under the Illinois Human Rights Act, the Cook County Human Rights Ordinance and the Chicago Human Rights Ordinance.

(c) Disability?

Disability status is a protected classification under the Illinois Human Rights Act, the Cook County Human Rights Ordinance and the Chicago Human Rights Ordinance.

(d) Gender?

Gender is a protected classification under the Illinois Human Rights Act, the Cook County Human Rights Ordinance and the Chicago Human Rights Ordinance. Additionally, gender identity is a protected classification under the Cook County Human Rights Ordinance and the Chicago Human Rights Ordinance.

(e) Sexual orientation?

Sexual orientation is a protected classification under the Illinois Human Rights Act, the Cook County Human Rights Ordinance and the Chicago Human Rights Ordinance.

(f) Religion?

Religion is a protected classification under the Illinois Human Rights Act, the Cook County Human Rights Ordinance and the Chicago Human Rights Ordinance.

(g) Medical?

There is no separate protected classification aside from disability status. However, the Genetic Information Privacy Act prohibits employers from seeking or using genetic information for personnel-related reasons. It is similar to the federal Genetic Information Non-discrimination Act except that the Genetic Information Privacy Act covers employers with at least one employee. Additionally, the AIDS Confidentiality Act provides that no person may order an HIV test without first obtaining the documented informed consent of the subject of the test or the subject’s legally authorized representative.

(h) Other?

The Illinois Human Rights Act also prohibits discrimination on the basis of color, national origin, ancestry, order of protection status, marital status, military status, arrest, and unfavorable discharge from military service. The Chicago Human Rights Ordinance further prohibits discrimination on the basis of color, national origin, ancestry, marital status, parental status, military discharge status and source of income. The Cook County Human Rights Ordinance also prohibits discrimination on the basis of color, national origin, ancestry, marital status, parental status, military discharge status, source of income and housing status.

Harassment What is the state law in relation to harassment?

The Illinois Human Rights Act explicitly prohibits sexual harassment, which is defined as:

“unwelcome sexual advances or requests for sexual favors or any conduct of a sexual nature when (1) submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment, (2) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual, or (3) such conduct has the purpose or effect of substantially interfering with an individual’s work performance or creating an intimidating, hostile or offensive working environment.”

Unlike the other provisions of the Human Rights Act, individuals can be named individually in a sexual harassment suit under Illinois law.

Family and medical leave What is the state law in relation to family and medical leave?

Illinois does not have its own family and medical leave act. However, the Illinois Human Rights Act provides various protections for pregnant workers and requires employers to provide reasonable accommodations to employees (and applicants) for any medical and common condition related to pregnancy or childbirth. The act explicitly provides that leave and/or a part-time or modified work schedule can be a reasonable accommodation to pregnant workers. Additionally, Illinois has a number of other laws which provide for leave, including:

  • the Blood Donation Leave Law;
  • the Civil Air Patrol Leave Law;
  • the Family Military Leave Act;
  • the Jury Duty Leave Law;
  • the Official Meeting Leave Law;
  • the School Visitation Rights Act;
  • the Victims’ Economic Security and Safety Act;
  • the Voter Leave Law;
  • the Illinois Child Bereavement Leave Act;
  • the Witness Duty Leave Law; and
  • the Working Mothers in the Workplace Act.

Privacy in the workplace

Privacy and monitoring What are employees’ rights with regard to privacy and monitoring?

The Consumer Fraud and Deceptive Practices Act prohibits:

  • an employer from publicly disclosing an employee’s social security number;
  • printing the number on an employee card;
  • requiring the employee to transmit the number online;
  • requiring an employee to use the number to access a website;
  • printing the number on any materials mailed to the employee unless required by law; or
  • encoding the number on a card or document.

Are there state rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

The Illinois Right to Privacy in the Workplace Act allows employers to access employees’ professional social media accounts. However, the act generally prohibits employers from requesting that any employee or prospective employee provide a password or other account information to enable the employer to gain access to an employee’s personal social networking accounts.

Bring your own device What is the latest position in relation to bring your own device?

There are no specific Illinois laws relating to this issue.

Off-duty To what extent can employers regulate off-duty conduct?

The Illinois Right to Privacy in the Workplace Act mandates that the use of lawful products off work premises during non-working hours may not be the basis of an employer’s discharge, refusal to hire or other adverse employment actions.

Gun rights Are there state rules protecting gun rights in the employment context?

On July 9 2013 Illinois became the last state to allow its citizens to carry a concealed firearm. The Illinois Concealed Carry Act provides that the owner of private real property of any type may prohibit the carrying of concealed firearms on the property under his or her control. All prohibited areas must post signage advising that carrying a concealed firearm on the property is prohibited. However, even if an employer prohibits firearms in its buildings, a firearm may be possessed in a parking area and stored in a locked vehicle out of plain view or in a locked container out of plain view. A holder of a concealed carry permit may also carry an unloaded firearm in the immediate area surrounding the vehicle for the purpose of storing or retrieving it from the trunk.

Trade secrets and restrictive covenants

Intellectual Property Who owns IP rights created by employees during the course of their employment?

Typically, intellectual property created by an employee during the scope of and course of his or her employment is owned by the employer. However, as best practice, employers are encouraged to include an “assignment of inventions” clause in any confidentiality agreement entered into with employees.

Restrictive covenants What types of restrictive covenants are recognized and enforceable?

Illinois courts will enforce restrictive covenants, so long as the terms are reasonable and necessary to protect a legitimate business interest of the employer. A restrictive covenant ancillary to a valid employment relationship is reasonable only if it:

  • is no greater than is required for the protection of a legitimate business interest of the employer;
  • does not impose undue hardship on the employee; and
  • is not injurious to the public. 

Whether a legitimate business interest exists is based on the totality of the facts and circumstances of the individual case. However, Illinois courts have found customer relationships, confidential information and trade secrets, and the stability of an employer’s workforce to be worthy of protection through a narrowly tailored non-compete agreement.

Non-compete Are there any special rules on non-competes for particular classes of employee?

Illinois courts will enforce non-compete agreements against physicians and other medical professionals. However, courts will look to whether the restraint on the practice of medicine (which is given some deference by the courts) is not greater than necessary to protect the employer’s interests or is otherwise injurious to the public. Thus, the courts may take into consideration the specialism of the provider and whether the agreement will cause a shortage of medical providers in a particular area.

Effective as of January 1 2017, the Illinois Freedom to Work Act prohibits private sector employers in Illinois from entering into non-compete restrictions with “low-wage employees,” which are defined as any employee who earns the greater of:

  • the hourly minimum wage under federal, state, or local law; or
  • $13.00 per hour. 

The act prohibits an employer from entering into an agreement that restricts the “low-wage employee” from performing:

  • any work for another employer for a specified period;
  • any work in a specified geographical area; or
  • work for another employer that is similar to such low-wage work for the employer included as a party to the agreement.

Labor relations

Right to work Is the state a “right to work” state?

No.

Unions and layoffs Is the state (or a particular area) known to be heavily unionized?

Rural Illinois (particularly southern Illinois) is not particularly heavily unionized; however, in Chicago, there is significant unionization and union activity.

What rules apply to layoffs? Are there particular rules for plant closures/mass layoffs?

Illinois has no state version of the Worker Adjustment and Retraining Notification Act that applies to plant closures and mass layoffs. However, under the Veterans Preference in Private Employment Act, an employer which has adopted a voluntary preference for hiring, promoting, or retaining a veteran over another equally qualified applicant or employee must apply such preference to reductions in force.

Discipline and termination

State procedures Are there state-specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

No, subject to the terms of any collective bargaining agreement.

At-will or notice At-will status and/or notice period?

Illinois is an at-will employment state. 

What restrictions apply to the above?

At-will employment can be altered by employment contracts. Handbooks can be considered employment contracts under Illinois law if they do not provide appropriate disclaimers.

Final paychecks Are there state-specific rules on when final paychecks are due after termination?

Final payment of wages is to be given at the time of separation, if possible, but no later than the next regularly scheduled payday.