Quick Facts — Employment Contract Lawyers (Illinois)

What is an Illinois Employment Contract?

In Illinois, an employment contract is an agreement executed between an employer and an employee that serves as the framework for the business relationship. Common terms and conditions covered in an employment contract include:

  • Job title and duties
  • Compensation
  • Benefits
  • Vacation and days off
  • Disciplinary procedures
  • Causes for termination
  • Severance packages
  • Company policies and standards

Illinois is an at will employment state. This means that employers are free to release workers from employment at any time without a reason and without advanced notice. One way to be protected from this law is to have an employment contract that outlines causes for termination and other clauses that protects an employee’s job.

Employment contracts can also protect employers through the use of restrictive covenants. A restrictive covenant is a clause that prohibits employees from certain actions like competing against the employer (non-compete clause) or revealing trade secrets (non-disclosure clause).

Are Employment Contracts Enforceable in Illinois?

Yes. Once an employment contract is agreed upon and a valid contract is formed under Illinois contract laws, an employment contract can be enforced in court. This applies to employment contracts that include agreements regarding wages, working hours, severance packages, and reasons for termination.

In January of 2022, Illinois, like many other states, revised its enforcement laws surrounding restrictive covenants like non-compete agreements. The new laws make it harder for employers to enforce these clauses against their employees.

Some changes in the new laws include:

  1. Restrictive covenants must be supported by adequate consideration if the employee has worked for the employer for at least two years after signing the agreement and the employer has provided the employee with benefits that may constitute consideration.
  2. Non-compete agreements are not enforceable if the employee makes less than $75,000 per year.
  3. Non-solicitation agreements are not enforceable if the employee makes less than $45,000 per year.
  4. Employers must provide employees with at least 14 days to review a restrictive covenant agreement

For more information on the changes to restrictive covenant enforcement laws, you can read the full Illinois Freedom to Work Act.

What Are the Legal Requirements for Illinois Employment Contracts?

According to the Illinois Employment Contract Act, employment contracts can be written, oral, express, or implied.

  • Written contract. The agreement and all terms and conditions are in writing and signed by both parties. This is the easiest contract to enforce.
  • Oral contract. An agreement created verbally without being recorded in writing.
  • Express contract. An exchange of promises where the terms are agreed upon by both parties and declared either orally or in writing.
  • Implied contract. Legally binding obligation that is formed based upon party’s actions, conduct, or circumstances.

The contracts cannot violate state or federal law and cannot go against public policy.

Types of Illinois Employment Contracts

Illinois employers use various types of employment contracts depending on the type of employee and the type of work contracted. The following contracts are most commonly used for hiring employees and workers:

  • Permanent. A more common type of employment contract used by an employer to hire a permanent employee. The employee will have regular hours and be paid regular compensation.
  • Fixed term. Used for workers who will only work for a specific period of time or to complete a specific job. At the end of the contract, employees are either brought into permanent employment or a new contract with a new term is executed.
  • Independent contractor agreement. Companies need a specific contract when hiring a contractor or a freelance worker because these workers are not company employees and will have different rights and responsibilities.

Frequently Asked Questions

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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


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Ohio

Asked on Apr 13, 2023

What's personal leave in an employment contract?

I have recently been offered a job, and the employment contract I have been provided with states that I am entitled to personal leave. I am not sure what this is, or what it entitles me to. I would like to know what rights and responsibilities I have regarding personal leave, and what the employer's expectations are of me with regards to this leave.

Jeffrey K.

Answered Apr 14, 2023

Personal leave sometimes replaces vacation and sick time. Some employers just give employees time off for whatever reason the employee chooses. To know more about the rights and responsibilities, you should speak to HR at your new employer who will help you with the employer's expectations and your rights under the leave provision in your contract. Also, look at your contract as it may provide insight as to how to implement the leave. When in doubt, speak to HR. Thanks.

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Employment

Employment Contract

Florida

Asked on Feb 23, 2023

Do I have to provide my employees with a paycheck stub?

We find employee pay stubs laying around in the warehouse and left in company vehicles

Diane D.

Answered Mar 21, 2023

Florida doesn't require employers to provide a pay stub with a paycheck, nor do they have to offer them in electronic format. Pay stub legislation in Florida instead defaults to federal laws under the Fair Labor Standards Act (FLSA).

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Employment

Employment Contract

Georgia

Asked on Apr 12, 2025

Can a company withhold a performance bonus if I leave before the payout date?

I recently resigned from my job, and in my employment contract, there was a provision for a performance bonus to be paid out at the end of the year. However, the payout date is a few months away, and I am concerned that the company may try to withhold the bonus since I am no longer employed with them. I want to know if they have the legal right to do so, or if I am still entitled to receive the bonus based on my performance during my time of employment.

Jerome L.

Answered Apr 15, 2025

This is a great—and very common—question. Whether the company can legally withhold your performance bonus after resignation depends heavily on how your employment agreement is written and how the bonus is classified. Key Factors to Consider: 1. Is the Bonus Discretionary or Earned? If your contract defines the bonus as discretionary, the employer generally has the right to decide whether to pay it and can condition it on continued employment. If the bonus is based on meeting specific performance goals or metrics, and those have been satisfied, it may be considered earned—even if the payment date is in the future. 2. Does the Contract Require You to Be Employed on the Payout Date? Many agreements include language stating the employee must be actively employed on the bonus payout date. If such a clause exists, the company may be within its rights to withhold the bonus, even if the performance was completed. 3. What Is the Bonus Period? If your bonus was based on a performance period that has already ended (such as a calendar or fiscal year), and you met your goals, you may have a stronger case for claiming the bonus as earned compensation. Georgia-Specific Note: In Georgia, employment is at-will, and courts generally uphold the terms of a written employment agreement. However, Georgia courts have also recognized that earned wages (which can include bonuses if not discretionary) must be paid. If the bonus is performance-based and the company has paid similar bonuses under the same conditions in the past, you may have grounds to assert that the payment is owed. What You Can Do: Review your employment agreement and any bonus policy documents closely. Look for phrases like “discretionary,” “earned,” and “must be employed on the payout date.” If the language is unclear, you may want to consult an attorney to evaluate whether the company is legally permitted to withhold the bonus—or if you may have a claim based on how the bonus was structured and earned. If you would like help reviewing your agreement, I’d be happy to assist.

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Employee Rights

Employment Contract

New York

Asked on Nov 26, 2024

Can an employer change the terms of employee benefits without providing notice or obtaining consent?

I work for a small company that has recently made some changes to our employee benefits package without any prior notice or consultation with the employees. The changes include reducing the amount of paid time off, increasing the employee contribution for health insurance, and eliminating certain retirement benefits. I am concerned about the legality of these changes and whether the employer has the right to alter the terms of our benefits without providing any notice or obtaining our consent.

Damien B.

Answered Dec 2, 2024

If you have an employment contract, the employer must adhere to the terms of that agreement. Similarly, if the company has an employee handbook, changes to benefits must align with the policies outlined therein. Courts may consider an employee handbook as a binding contract if it creates an expectation of certain benefits. If your benefits are guaranteed in a written contract or employee handbook and the employer did not follow proper procedures to make changes, you may have a claim for breach of contract. Employers are generally encouraged to provide clear communication and advance notice of benefit changes to maintain trust and compliance with legal and policy obligations. If you have any further questions, feel free to reach out.

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Employment

Employment Contract

Washington

Asked on Jul 15, 2025

Can my employer change the terms of my employment contract without my consent?

I have been working for a company for the past three years, and my employment contract clearly outlines my job responsibilities, salary, and benefits. However, recently my employer informed me that they are planning to make changes to my contract, including reducing my salary and removing certain benefits. I am concerned about the legality of these changes and whether my employer can modify the terms of my contract without my consent.

Merry K.

Answered Jul 22, 2025

I'm sorry to hear about this proposed change. Whether or not your employer can make such changes unilaterally depends almost entirely on how your contract is written. For example, if your contract clearly states that you are an "at will" employee, your employer can not only make whatever changes it wants, but can also discipline you or terminate you with no reason at all and only a one second advance notice. If it's not an "at will" contract, there may be a paragraph or two that addresses amendments to the agreement - eg, some such contracts may say that an employer can make changes with two weeks advance written notice; another may say that changes will be negotiated in advance between employer and employee. You may want to have an employment attorney, such as myself, review your contract as well as any recent correspondence you may have received from your employer. You may also want to try to very quietly try to find out whether or not other employees are possibly in the same boat as you - it's possible that the employer is cutting back on some benefits to save money, rather than laying off or terminating some or all of their employees. Good luck to you - and if you'd like to reach out to me, you can find me through ContractsCounsel.com or on WSBA.org Please be aware that the above information is provided for educational purposes only, and no attorney/client relationship has been formed Merry A. Kogut WSBA #16153

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