Illinois Employment Contract Template

An Illinois employment contract is a written agreement between an employer and an employee that lays out essential terms such as compensation, job duties, benefits, and how the job may end. While employment in Illinois is typically at-will, contracts offer both parties clarity and protection by putting expectations in writing.

• At-will employment: Illinois follows the at-will standard, meaning either party can terminate employment at any time, except in cases of discrimination, retaliation, or violations of public policy.
• Minimum wage: Illinois’ minimum wage is $15.00/hour as of January 1, 2025. Tipped workers have a minimum hourly wage of $9.00.
• Overtime: Non-exempt employees must be paid 1.5× their regular rate for hours over 40 per week.
• Meal/rest breaks: Employees working 7.5+ continuous hours must receive a 20-minute unpaid meal break, starting no later than 5 hours into the shift (820 Illinois Compiled Statutes 140/3).
• Paid leave: Beginning January 1, 2024, the Paid Leave for All Workers Act requires employers to provide up to 40 hours of paid leave annually, which employees can use for any reason.
• Pay frequency: Wages must be paid at least semi-monthly, no later than 13 days after the end of the pay period (820 ILCS 115/3). Employers must also provide written notice of pay rates and deductions.
• Final pay: All wages are due by the next regular payday upon termination, whether voluntary or involuntary (820 ILCS 115/5).
• Child labor: Work permits are required for minors under 16. Youths face restrictions on hours during school weeks and are barred from hazardous occupations (820 ILCS 205).
• Non-competes: The Illinois Freedom to Work Act prohibits non-compete agreements for employees earning under $75,000 annually (increasing to $80,000 by 2027 and up to $90,000 by January 1, 2037). Non-solicitation agreements are barred below $45,000. Agreements must be reasonable in time, activity, and geography.
• E-signatures: Illinois recognizes electronic records and signatures under the Electronic Commerce Security Act (5 ILCS 175/).
• Recordkeeping: Employers must retain payroll records (hours, wages, deductions) for at least 3 years (820 ILCS 105/8).

When drafting an Illinois employment contract, cover these essentials:

1. Employment status: Note that jobs are generally at-will, meaning either party can end the relationship at any time unless a law or written agreement says otherwise.
2. Pay details: List the wage or salary, ensuring it meets the $15.00/hour minimum (effective Jan. 1, 2025). If tips are involved, confirm total earnings meet the full minimum wage.
3. Overtime: State whether the employee is exempt or non-exempt. Non-exempt employees must earn 1.5× pay for hours over 40 per week.
4. Breaks: Include the state requirement for a 20-minute unpaid meal break for shifts of 7.5 hours or more, to start within the first 5 hours of work.
5. Leave: Outline available leave, including the 40 hours of paid leave per year under the Paid Leave for All Workers Act, plus any employer-specific benefits.
6. Pay schedule: Specify that wages will be paid at least semi-monthly, within 13 days of the pay period’s end, and provide details on pay statements.
7. Termination and final pay: Reaffirm at-will status and explain that final wages are due on the next regular payday.
8. Minors: If hiring under 16, note the need for work permits and compliance with hour and hazard restrictions.
9. Non-competes: Only include non-compete clauses if the worker earns above $75,000 annually (rising to $80,000 by 2027). Ensure any restrictions are reasonable in scope and geography.
10. Signatures: Confirm that electronic signatures are valid under Illinois law.