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Illinois Independent Contractor Agreement Template

What Illinois law puts into the document: the Freelance Worker Protection Act's four required terms, a 30 day ceiling on the agreed payment date, and a two year retention duty.

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Introduction

Illinois is one of the few states that tells you what an independent contractor agreement has to say. The Freelance Worker Protection Act, 820 ILCS 193, requires a written contract whenever a contracting entity retains a natural person as a contractor for $500 or more, counting either a single contract or every contract between the same two parties over the immediately preceding 120 days. The Act then prescribes four terms the writing must contain, and in Section 15(b)(3) it caps the payment date the parties are permitted to agree to at 30 days after the products or services are provided. That cap is what most often breaks a template written for another state, because a net 45 or net 60 clause is outside what the statute allows in Illinois. Whether the worker is a contractor in the first place is a separate question that this Act deliberately does not answer, and Illinois answers it differently depending on which statute is being applied, because 820 ILCS 185/75 directs each agency to check compliance "utilizing their own definitions, standards, and procedures."

Key Things to Know

  1. 1

    The Illinois payment clause is capped, not defaulted. 820 ILCS 193/15(b)(3) requires the contract to state a payment date, or a mechanism for setting one, that is no later than 30 days after the products or services are provided. Because it limits the date the parties may agree to, a net 45 or net 60 term is facially non-compliant for a covered Illinois engagement, even though both are ordinary elsewhere.

  2. 2

    The Act is triggered by a rolling look-back, not a single invoice. Coverage begins at $500 or more paid to the same freelance worker, counted either in one contract or when aggregated with all contracts between the same contracting entity and that worker during the immediately preceding 120 days (820 ILCS 193/5). Several small engagements inside one 120 day window can cross the line together.

  3. 3

    Draft the required terms from the statute, not from the agency web page. 820 ILCS 193/15(b) requires (1) names and contact information for both sides plus the contracting entity's mailing address, (2) an itemization of the products and services, their value, and the rate and method of compensation, (3) the capped payment date or its mechanism, and (4) the deadline for the worker to submit a list of what was rendered where the entity needs it for internal processing. The Illinois Department of Labor summary omits the value, the mailing address, and item (4) entirely, and adds a dates-of-service term the statute does not contain.

  4. 4

    A freelance worker under the Act is a natural person (820 ILCS 193/5). On the face of the statute an engagement routed through the contractor's LLC or corporation appears to fall outside the Act, which changes what the document has to contain. Construction services are excluded as well and are governed instead by the Employee Classification Act, 820 ILCS 185. The definition of contracting entity also excludes the federal government, the State of Illinois, units of local government including school districts, and foreign governments.

  5. 5

    Illinois has no single classification test, and the legislature said so. 820 ILCS 185/75 directs the labor, employment security, revenue, and workers' compensation agencies to check compliance "utilizing their own definitions, standards, and procedures." Unemployment insurance runs a strict ABC test at 820 ILCS 405/212; the Wage Payment and Collection Act runs a parallel three prong exclusion at 820 ILCS 115/2, worded "control and direction" and carved back for staffing and placement employers; construction uses a modified ABC at 820 ILCS 185/10 that includes a twelve criteria sole proprietor safe harbor; workers' compensation uses a common law right-to-control totality analysis (Roberson v. Industrial Comm'n, 225 Ill. 2d 159 (2007)). The Illinois Minimum Wage Law has no ABC test at all, only "permitted to work" plus categorical exclusions. Whether any particular engagement passes is fact dependent, and attorney review is an option before you rely on the classification.

  6. 6

    Two housekeeping duties sit outside the contract text. The contracting entity must retain the contract for no less than 2 years and produce it to the Department on request (820 ILCS 193/15(c)), which is shorter than California at four years and New York at six, and it must furnish the worker a copy of the writing, physically or electronically (820 ILCS 193/15(a)). Any clause purporting to waive rights under the Act is void as against public policy (820 ILCS 193/35(b)), though non-compliance does not void the contract itself (820 ILCS 193/35(d)).

  7. 7

    The Act reaches only contracts taking effect after July 1, 2024 (820 ILCS 193/35(a), 193/99). That is a formation trigger rather than an operative date, so an engagement that took effect on or before that day sits outside the Act even where the work and the payment happen later. Renewals and new statements of work signed since then are inside it.

Key decisions before you file

Before you file a Independent Contractor Agreement in Illinois, a few decisions shape the document: which option to choose and what each one means. The Independent Contractor Agreement guide walks through them.

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Illinois Independent Contractor Agreement

This set is the national Independent Contractor Agreement with the Illinois terms applied. The bracketed items in Sections 1, 2, and 4 are the terms that the Freelance Worker Protection Act, 820 ILCS 193, requires a written contract to contain when the Act applies.

1. Parties. This Independent Contractor Agreement (the "Agreement") is entered into as of ________________, [YEAR] (the "Effective Date") by and between [COMPANY NAME], a [TYPE OF ENTITY] organized and existing under the laws of [STATE], with its principal place of business at [COMPANY ADDRESS] ("Company"); and [CONTRACTOR NAME], an individual residing at [CONTRACTOR ADDRESS] ("Contractor"). Company and Contractor may be referred to individually as a "Party" and collectively as the "Parties."

Mailing addresses. For purposes of this Agreement, the mailing address of Company is [COMPANY MAILING ADDRESS] and the mailing address of Contractor is [CONTRACTOR MAILING ADDRESS]. (820 ILCS 193/15(b)(1) requires the name and contact information of both parties, "including the mailing address of the contracting entity." The mailing address is a separate, express requirement.)

2. Services. Contractor shall perform the following services (the "Services"): [DESCRIPTION OF SERVICES]. Contractor shall deliver: [LIST OF DELIVERABLES].

Means and manner. Contractor shall determine the means, manner, methods, and sequence of performing the Services. Company may specify the results to be achieved and the deadlines for achieving them, but does not direct how the Services are performed.

Place of performance. Contractor shall perform the Services at ______ (Contractor's own premises, remotely, or another agreed location), and is not required to perform the Services at any premises of Company except where the nature of the Services requires it.

Itemized Services and value. The Services and their respective values are itemized in Schedule A. (820 ILCS 193/15(b)(2) requires three separate things: an itemization of all products and services, the value of those products and services under the terms of the contract, and the rate and method of compensation. Value and rate are not the same requirement.)

3. Independent Contractor Status. Contractor is an independent contractor and not an employee, agent, partner, or joint venturer of Company. Contractor represents that Contractor (a) is engaged in an independently established trade, occupation, profession, or business of the same nature as the Services; (b) offers services to the general public and is free to accept work from other clients; (c) maintains Contractor's own place of business, tools, and equipment as appropriate to the Services; and (d) bears the opportunity for profit and the risk of loss on the Services. This Agreement is non-exclusive.

Nothing in this Section determines the legal classification of Contractor under Illinois law. Illinois applies different tests under different statutes, and no provision of the Freelance Worker Protection Act decides classification (820 ILCS 193/35(e)).

4. Fees and Payment. Company shall pay Contractor a fixed fee of $, an hourly rate of $ per hour, or the milestone amounts set out in Schedule A. Compensation is calculated and paid as follows: [RATE AND METHOD].

Payment date. Company shall pay Contractor no later than 30 days after Contractor delivers the products or services under this Agreement. (820 ILCS 193/15(b)(3) caps the agreed payment date at "no later than 30 days after the products or services are provided." This is a ceiling on the drafted term, not a default that applies only when the contract is silent, so a net 45 or net 60 clause does not comply.)

No reduction as a condition of payment. Once Contractor has commenced preparation of the products or performance of the Services, Company shall not require, as a condition of timely payment, that Contractor accept less than the contracted compensation (820 ILCS 193/10(b)).

Submission of services rendered. Contractor shall submit to Company a list of the products or services rendered under this Agreement by [DATE], so that Company's internal processing deadlines are met and compensation is timely rendered by the date stated above (820 ILCS 193/15(b)(4)).

5. Term and Termination. This Agreement begins on the Effective Date and continues until ______ or completion of the Services, unless terminated earlier. Either Party may terminate on [NUMBER] days written notice, or immediately on written notice if the other Party materially breaches and fails to cure within [NUMBER] days after written notice describing the breach. On termination, Company shall pay Contractor for all Services performed through the effective date of termination.

6. Ownership of Work Product. Upon full payment of all amounts due, Contractor assigns to Company all right, title, and interest in the deliverables created specifically for Company under this Agreement. Contractor retains all right, title, and interest in tools, methods, templates, and know-how owned before the Effective Date or developed independently, and grants Company a non-exclusive, perpetual, royalty-free license to use any such materials incorporated into a deliverable.

7. Confidentiality. Contractor shall not use Company's Confidential Information except to perform this Agreement and shall not disclose it without Company's prior written consent. Confidential Information does not include information that is or becomes public through no fault of Contractor, was known to Contractor without restriction before disclosure, is independently developed, or is rightfully received from a third party without restriction.

8. Taxes, Benefits, and Insurance. Contractor is responsible for all federal, state, and local taxes on amounts paid under this Agreement. Company will not withhold income tax, Social Security, or Medicare contributions, and will report payments on IRS Form 1099-NEC where required. Contractor is not eligible for employee benefits provided by Company, except where coverage is required by law. The parties acknowledge that how they treat payments for tax and insurance purposes does not by itself establish Contractor's status under any Illinois statute.

9. Indemnification. Each Party shall indemnify the other against third-party claims arising from the indemnifying Party's breach of this Agreement, negligence, or willful misconduct.

10. General. This Agreement is governed by the laws of the State of Illinois, without regard to its conflict of laws rules. It is the entire agreement between the Parties on its subject matter, may be amended only in a writing signed by both Parties, may not be assigned without the other Party's prior written consent, remains in effect if any provision is held unenforceable, and may be executed in counterparts, including by electronic signature.

No waiver of statutory rights. Nothing in this Agreement waives any right under the Freelance Worker Protection Act. Any provision purporting to waive rights under that Act is void as against public policy (820 ILCS 193/35(b)).

Company: ______________________________ Date: ____________

Print name and title: ______________________________

Contractor: ______________________________ Date: ____________

Print name: ______________________________

Company duties outside the contract text. Company shall furnish a copy of the signed written contract to Contractor, physically or electronically (820 ILCS 193/15(a)), and shall retain the contract for no less than 2 years and make it available to the Illinois Department of Labor on request (820 ILCS 193/15(c)). Illinois construction engagements are outside the Freelance Worker Protection Act and instead carry a jobsite and office posting duty (820 ILCS 185/15(b)) and an annual electronic report to the Department due on or before April 30 following the taxable year (820 ILCS 185/43(a)).

Scope note. The Freelance Worker Protection Act reaches contracts taking effect after July 1, 2024 (820 ILCS 193/35(a), 193/99), where the contractor is a natural person paid $500 or more, counted alone or aggregated with all contracts between the same parties over the immediately preceding 120 days, and where the products or services are provided in Illinois or for a contracting entity located in Illinois.

This Illinois set supplements the national Independent Contractor Agreement template. It is general information, not legal advice; attorney review is available.

Illinois Requirements for Independent Contractor Agreement

Illinois Written Contract Required at $500 Over 120 Days

Under 820 ILCS 193/15(a), a contracting entity that retains a freelance worker must reduce the contract to writing and furnish the worker a copy, physically or electronically. 820 ILCS 193/5 sets coverage at $500 or more, in a single contract or aggregated with all contracts between the same parties during the immediately preceding 120 days, for products or services provided in Illinois or for a contracting entity located in Illinois.

Illinois Four Mandatory Contract Terms

820 ILCS 193/15(b) requires the writing to contain, at a minimum: (1) the name and contact information of both parties, including the contracting entity's mailing address; (2) an itemization of all products and services, their value under the contract, and the rate and method of compensation; (3) the payment date or the mechanism for determining it; and (4) the date by which the worker must submit a list of products or services rendered where the entity requires it for internal processing. Draft from the statute; the Department's web summary omits the value, the mailing address, and item (4).

Illinois 30 Day Ceiling on the Agreed Payment Date

820 ILCS 193/15(b)(3) requires the stated payment date, or the mechanism for setting it, to be no later than 30 days after the products or services are provided. This is a cap on the term the parties may agree to, so net 45 and net 60 clauses are non-compliant for covered engagements. 820 ILCS 193/10(a) separately makes compensation due no later than 30 days after completion where the contract states no date or mechanism.

Illinois Prohibition on Discounting Payment After Work Begins

Under 820 ILCS 193/10(b), once a freelance worker has commenced preparation of the product or performance of the services, the contracting entity may not require, as a condition of timely payment, that the worker accept less than the contracted compensation. A prompt-payment discount or an invoice-stage renegotiation clause conflicts with this provision.

Illinois Two Year Contract Retention and Production to IDOL

820 ILCS 193/15(c) requires the contracting entity to retain the contract for no less than 2 years and to make it available to the Illinois Department of Labor upon request. The Illinois period is shorter than California's four years and New York's six, so multistate businesses should retain to the longest applicable period.

Illinois Anti-Waiver Rule

820 ILCS 193/35(b) makes any provision of a contract purporting to waive rights under the Freelance Worker Protection Act void as against public policy. 820 ILCS 193/35(d) provides that non-compliance does not render the contract void, voidable, or unenforceable, so the remedy for a defective writing is damages under Section 30 rather than loss of the contract.

Illinois Effective Date Limit: Contracts Taking Effect After July 1, 2024

820 ILCS 193/35(a) provides that the Act applies "only to contracts taking effect after the effective date of this Act," and 820 ILCS 193/99 sets that date at July 1, 2024. Because this is a formation trigger rather than an operative date, a contract that took effect on or before July 1, 2024 sits outside the Act even where performance and payment occur afterward.

Illinois Coverage Exclusions Under the Freelance Worker Protection Act

820 ILCS 193/5 limits freelance worker to a natural person, so engagements routed through an LLC or corporation appear to fall outside the Act, and it excludes individuals performing construction services, individuals performing services as employees under Section 10 of the Employee Classification Act, and employees as defined in Section 2 of the Wage Payment and Collection Act. Contracting entity excludes the federal government, the State of Illinois, local governments including school districts, and foreign governments.

Illinois Construction Posting and April 30 Annual Report

For construction, which the Freelance Worker Protection Act does not reach, 820 ILCS 185/15(b) requires a notice prepared by the Department to be posted conspicuously at each job site and in each office, in English, Spanish, and Polish. 820 ILCS 185/43(a) requires an annual electronic report to the Illinois Department of Labor, due on or before April 30 following the taxable year, of all payments to any individual, sole proprietor, or partnership performing construction services who is not classified as an employee.

Illinois Classification Is Determined Separately Under Each Act

820 ILCS 185/75 directs the Departments of Labor, Employment Security, and Revenue and the Illinois Workers' Compensation Commission to check compliance "utilizing their own definitions, standards, and procedures," and 820 ILCS 193/35(e) provides that nothing in the Freelance Worker Protection Act determines classification. Unemployment insurance applies 820 ILCS 405/212, the Wage Payment and Collection Act applies 820 ILCS 115/2, construction applies 820 ILCS 185/10, and workers' compensation applies a common law right-to-control analysis under Roberson v. Industrial Comm'n, 225 Ill. 2d 159 (2007). Classification is fact dependent and attorney review is an option.

Illinois Model Freelance Contracts Published by IDOL

820 ILCS 193/15(d) requires the Illinois Department of Labor to make model contracts available free on its website in English and in the 8 languages most commonly spoken by limited English proficient individuals in the State; the Department currently publishes eleven versions. The English model form does not contain a field for the Section 15(b)(4) list-submission deadline and does not separately label the value of the products and services, so the form alone does not guarantee compliance with Section 15(b).

Frequently Asked Questions

Yes, for engagements the Freelance Worker Protection Act covers. Under 820 ILCS 193/15(a), a contracting entity that retains a freelance worker must reduce the contract to writing and give the worker a copy, physically or electronically. Coverage starts at $500 or more, counted in one contract or aggregated across all contracts with the same worker in the preceding 120 days. Outside that Act there is no general Illinois rule that a contractor agreement be written.

820 ILCS 193/15(b) lists four. The names and contact information of both parties, including the contracting entity's mailing address. An itemization of the products and services, their value under the contract, and the rate and method of compensation. The date the entity must pay, or the mechanism for setting it, no later than 30 days after delivery. And the date by which the worker must submit a list of what was rendered, where the entity needs that list to hit its internal processing deadlines. The Illinois Department of Labor's web summary of these terms is incomplete, so work from the statute.

Not for an engagement covered by the Freelance Worker Protection Act. 820 ILCS 193/15(b)(3) sets a ceiling on the payment date the parties may agree to, capping it at 30 days after the products or services are provided. Unlike a gap-filling default, which only steps in when a contract is silent, a ceiling limits what can be written down at all, so a longer stated term does not comply.

The statute defines a freelance worker as a natural person hired or retained as an independent contractor (820 ILCS 193/5), so on the face of the text an engagement with an LLC or a corporation appears to sit outside the Act and outside its required terms. That is a materially different outcome from contracting with the individual, and because it turns on how the entity actually operates rather than on the paperwork alone, it is worth confirming with counsel before relying on it.

No. 820 ILCS 193/5 excludes any individual performing construction services from the definition of freelance worker. Illinois construction is governed instead by the Employee Classification Act, 820 ILCS 185, which presumes an individual performing services for a contractor is an employee, provides a modified ABC test with a twelve criteria sole proprietor safe harbor at Section 10(c), and adds a jobsite and office posting duty at Section 15(b) plus an annual report to the Department due on or before April 30 at Section 43.

For some purposes only, and which test applies depends on the statute being applied. Unemployment insurance uses a strict ABC test at 820 ILCS 405/212. The Wage Payment and Collection Act uses a parallel exclusion at 820 ILCS 115/2 worded "control and direction" with a carve-back for staffing and placement employers. Construction uses a modified version at 820 ILCS 185/10. Workers' compensation uses a common law right-to-control totality analysis under Roberson v. Industrial Comm'n, 225 Ill. 2d 159 (2007), and the Minimum Wage Law has no ABC test at all. 820 ILCS 185/75 confirms the point by directing each agency to use its own definitions, standards, and procedures.

No, and the statute is explicit about it. 820 ILCS 193/35(e) provides that no provision of the Act relating to freelance workers is to be read as making a determination about whether a worker is an employee or an independent contractor. The Act tells you how to paper an engagement with someone already treated as a contractor; whether that treatment is correct is decided under the separate tests, on the facts of how the work is actually performed. Attorney review is available where the classification is close.

Yes. 820 ILCS 193/15(d) requires the Illinois Department of Labor to publish free model contracts in English plus the eight languages most commonly spoken by limited English proficient residents; the Department currently publishes eleven, including Spanish, Polish, Traditional and Simplified Chinese, Tagalog, Arabic, Urdu, Gujarati, Hindi, and Russian. They are useful as a starting point, but the English model form does not include a field for the Section 15(b)(4) list-submission deadline and does not separately label the value of the products and services, so copying the form alone does not guarantee the statute is satisfied.

The $500 statutory damages under 820 ILCS 193/30(b) are conditional, not automatic: they are available only where the worker requested a written contract before beginning the work. A worker who prevails on the written-contract claim together with another claim under the Act recovers the value of the underlying contract or $500, whichever is greater. Separately, late or short payment carries double the underpayment plus costs and all reasonable attorney's fees under Section 30(a), with a two year limitations period running from the date final compensation was due.

Two years. 820 ILCS 193/15(c) requires the contracting entity to retain the contract for no less than 2 years and to make it available to the Illinois Department of Labor on request. That is the shortest of the three comparable regimes, since California requires four years and New York six, so a business working across state lines should keep to the longest period that applies to it rather than to the Illinois minimum.

Under 820 ILCS 185/40(a) the civil penalty is up to $1,000 for each violation found in a first audit and up to $2,000 for each repeat violation within five years, with each person and each day counted separately. Willful violations can double those amounts, add punitive damages to the worker, and carry a Class C misdemeanor that escalates to a Class 4 felony on a second violation within five years (Section 45). Section 63 makes a corporate officer or agent who knowingly permits a violation individually liable. Failing to carry required workers' compensation coverage is penalized separately under 820 ILCS 305/4.