Skip to the main content.

Frequently asked questions.


Instructional videos about Horizon and working with our solutions.


Helpful downloads and eBooks to empower your business.

Tax & HR Alerts

Helpful tax and HR alerts to help keep your business compliant.

Forms & Documents

Payroll and tax-related forms and documents.


Horizon's blog provides valuable insight into payroll, compliance, human resources, and more.

Success Stories

See our client success stories for a case study on how we can help your business.

Featured blog post

How Long Should Employee Onboarding Take

Featured blog post

Tips For Success With Seasonal Employees

Our Team

Payroll and HR strategy requires intelligent technology, personal attention and specialized expertise in the needs and nuances of your business. 

Clients & Industries

We provide payroll and tax processing services for businesses from 1 to 1,000 employees or more. Today, we have nearly 1,000 customers in 40 states.

6 min read

Illinois Specific Employment Regulations

Labor laws exist to protect both employees and employers, and a crucial part of running any business is maintaining awareness of them and making sure they're being adhered to! As an employer in Illinois, it’s essential to know and comply with both federal and state labor laws to provide for your employees and prevent your business from facing hefty fines and legal fees.  

While federal labor regulations apply to every business operating in every state, Illinois has its own set of state-specific employment regulations that are equally important to be aware of.

Disclaimer: these materials do not constitute legal advice and should not be substituted for the advice of legal counsel.

Read on to learn more or contact Horizon today for more information. 

Employment Law vs. Labor Law in Illinois

While “employment law” and “labor law” might seem like interchangeable terms, they have distinct legal meanings that affect how and when they're applied. Employment law generally refers to a relationship between an employer and a single, individual employee. On the other hand, labor law refers to the relationship between an employer and a collective group of current employees, like those that are a part of a collective bargaining agreement or union. Both Illinois employment laws and Illinois labor laws have additional or supplemental requirements separate from their federal counterparts – requirements that affect the rights and benefits given to employees by the Illinois Department of Labor.


Illinois Employment Laws and Regulations

Illinois employers are required to follow both federal and state laws and regulations when it comes to employment – in some cases, Illinois regulations can be at a higher standard than their federal equivalents, so it’s vital to fully understand what the law requires! This includes minimum wage laws, leave requirements, mandatory break periods, and more. It’s important to note, though, that while these laws and regulations apply to all of your employees, they typically don’t extend to independent contractors.    

Illinois Minimum Wage and Tipped Wages

Per the Illinois minimum wage law, state minimum wage is set to increase over the next three years; to $13 an hour in January 2023, $14 an hour in January 2024, and $15 an hour in January 2025. The minimum wage for tipped employees is currently $7.20, but will increase to $9 an hour by 2025. Illinois law also allows for subminimum wage to be paid to disabled workers, but only with express permission and licensure from the Department of Labor. In addition to complying with state laws, businesses are obligated to adhere to minimum wage standards outlined in the Fair Labor Standards Act.    

Overtime Rules, Payment, and Exceptions

In addition to meeting the overtime requirements in the Fair Labor Standards Act, Illinois laws require businesses to provide overtime pay at a rate of 1.5 times an employee’s regular rate for each hour after more than 40 hours of work per week. There are some exceptions, including agricultural labor workers, commissioned employees, or employees of particular educational or residential childcare institutions. For more information, consult the Illinois Department of Labor’s FAQ page. 

Mandatory Breaks for Workers

Per Illinois law, employees that work a shift of 7 ½ continuous hours are entitled to a meal break no later than 5 hours after their shift begins. The meal period needs to be at least 20 minutes long, and additional meal breaks of the same length must be provided for every additional 4 ½ hours worked. This applies to both full-time and temporary workers. Additionally, the Illinois "One Day Rest in Seven" Act prohibits employees from working for seven days straight; one period of 24 hours of rest must be given per each consecutive 7-day period. 

Required Employee Leave (Medical, Bereavement, etc.)

Both the state of Illinois and the federal government have a wide variety of regulations and employment laws concerning employee leave that businesses are required to provide. In March 2023, SB208 was signed into law. Starting March 21st, 2024, paid leave will begin to accrue for eligible employees at a rate of 1 hour per every 40 hours worked. This paid leave can be used for any reason.  

Additionally, employers are required to allow employees specific amounts of unpaid leave for several causes, including jury duty, loss of a loved one or family member, pregnancy, and other events that could cause an employee undue hardship if they were to continue working through them. This unpaid leave can range from a few days for jury duty to 30 days or up to 12 weeks for some situations.

Non-Required Leave (Sick, Vacation, and Holiday Leave)

While many businesses choose to offer additional leave as part of their benefits packages, there is no Illinois state requirement for particular forms of paid and unpaid leave. Sick leave, vacation time, and holiday leave are not mandated by the state of Illinois and as such are considered benefits of employment rather than requirements.  


Hiring and Termination Laws for Employers

Illinois is an employment-at-will state, which means that either an employer or an employee may terminate employment at any time, with or without a cause – provided there is no discrimination based on sex, race, color, religion, marital status, military service, national origin, ancestry, citizenship status, age, mental or physical handicap, or unfavorable military discharge history. If a final paycheck isn’t issued at the time of an employee quitting, all final compensation (including bonuses, leftover vacation pay, wages, and commissions) must be paid on an employee’s next regularly scheduled payday.  

Discrimination in the Workplace

The Illinois Human Rights Act serves to provide protection against discrimination in the workplace. It covers additional classes not included in Title VII and includes ancestry, marital status, military status, protective order status, work authorization status, citizenship status, and certain arrest and conviction records. Additionally, the Illinois Equal Pay Act mandates equal wages for equal work and job duties within a pay scale, and a recent law passed in August 2023 requires all employers with more than 15 employees to provide salary ranges and benefits in job postings for potential job applicants to see before they apply. 

Occupational Safety Regulations

Several of the Illinois Occupational Safety and Health Administration’s regulations are more comprehensive and rigorous than the federal government’s OSHA. In particular, Illinois OSHA requires regular and frequent workplace inspections, additional training for workers interacting with specific hazards and industries, and mandates that every workplace has an Injury and Illness Prevention Program that identifies and mitigates potential workplace risks.  

Other Illinois Labor Laws

Paid leave, overtime rates, discrimination, and occupational safety are often the most focused on kinds of employment regulations, but there are other labor laws that are equally worth an employer's attention, especially in Illinois. 

Background Check and Drug Testing Laws

Background checks and drug testing are both legal in Illinois, but there are a few conditions. When it comes to background checks, an employer is legally allowed (and, for positions in healthcare, law enforcement, firefighting, and more, may be required) to perform a background check on a prospective employee. However, credit checks are typically not allowed except in specific positions in law enforcement, insurance, and debt collection. Illinois employers are also allowed to enact their own policies around drug testing and marijuana use, and they are not required to accommodate employees' use of marijuana in the workplace. However, employers cannot take an action based on lawful drug use (marijuana) that takes place outside of work hours. 

Sexual Harassment Training Mandates

In Illinois, sexual harassment training is mandatory for employees and must be completed within the first 30 days of employment and repeated annually.  

Record-Keeping Regulations

In addition to federal requirements, employers in Illinois are required to keep and maintain wage-related records for at least three years. Additionally, records for tipped employees, temporary workers, workers being paid subminimum wages, workers who receive paid vacation must be retained, though those requirements will depend on the situation. 


Whistleblower Protection Laws

Whistleblower protection is in full effect in Illinois; employers are prohibited from enacting policies that ban employees from contacting law enforcement or a governmental agency if they have concerns about a violation of a federal law, rule, or regulation. Retaliation is also strictly prohibited.   

Child Labor Laws

The Illinois Department of Labor has enacted the Illinois Child Labor Law, which sets forth certain restrictions on workers under 16 and prohibits children under the age of 14 from working except in particular circumstances. For children under 16, the exact restrictions on work depend on the age of the minor and the industry they’re working in, but generally include limitations on hours worked per week and the time of the shifts they’re allowed to work.  

Non-Compete Agreements

Per the Illinois Freedom to Work Act, non-compete agreements between employers and employees who earn less than $75,000 per year are prohibited. Above that threshold, non-compete agreements are heavily disfavored and likely to be considered an unenforceable element of an employment contract, barring specific circumstances.   

Why is It Important for My Company to Stay Compliant?

As an employer, compliance with both state and federal law is both a legal obligation and a responsibility you’re required to uphold. Failure to do so can result in penalties that range from monetary harm to reputational damage and even business closure! On their own, fines and fees from compliance failure can land in the tens or hundreds of thousands, which is enough reason for employers to want to stay on top of new laws and work to stay compliant with all applicable federal requirements. 

Breaking the Law Means Fines, Penalties, and More

Fines for violating any piece of employment law can be costly; for example, if the Equal Pay Act is violated, employers can be fined up to $10,000 for each affected employee. Violations of Child Labor Laws can result in fines of up to $5,000 per violation, and civil penalties for OSHA violations can range from $1,000 to $10,000 per violation! If violations are substantial, a workplace can be shut down for further investigations, which can further damage an employer. 

Employees Have the Rights in the State of Illinois

Overall, the state of Illinois is very employee-friendly and has enacted several pieces of legislation designed to protect the rights of workers across the board. As an employer, it is your legal duty and responsibility to be aware of and respect those rights as you manage your team. 


Horizon is a Trusted Compliance Partner for Businesses

For over 20 years, Horizon has been a trusted partner that businesses throughout Cook County and beyond have come to rely on for quality service and superior customer focus! Our services and business solutions are designed to help your business succeed, avoid costly mistakes, and prepare for whatever comes next! Learn more about our industry-leading payroll and HR solutions here. 

Contact Us Today for More Information

To learn more about our services and how they can help your business, contact us today for more information. 

FMLA: Common Mistakes to Avoid

5 min read

FMLA: Common Mistakes to Avoid

The Family and Medical Leave Act (or FMLA) is a crucial piece of federal legislation that protects the rights of workers whenever they need to take...

Read More
HR and Business Success Strategies During Inflation

6 min read

HR and Business Success Strategies During Inflation

Periods of rising inflation can pose a significant challenge for both a business and its employees. As costs rise, companies face higher prices and...

Read More
Our End-of-Year HR Checklist

8 min read

Our End-of-Year HR Checklist

As the calendar year draws to a close, it's crucial for HR professionals to stay on top of various tasks in order to ensure a smooth transition into...

Read More