How to Hire a New Employee in Illinois (2026)
Reviewed by DocDraft Legal Team · Illinois · Last updated 2026-05-18
Putting a worker on a Illinois payroll triggers a sequence of state-specific filings on top of federal Form I-9 and Form W-4. In Illinois, $15.00 per hour effective January 1, 2025 (unchanged in 2026); tipped employees $9.00 (60% of minimum wage); youth under 18 working under 650 hours/year: $13.00. Illinois accepts the federal new-hire report via the state agency with the report due within 20 days of hire date. What this guide covers: the Illinois minimum wage, new-hire reporting, UI tax registration, workers'-compensation coverage threshold, E-Verify posture, and the at-will doctrine.
Key Considerations
The administrative front end in Illinois has two doors: new-hire reporting and UI tax registration. The new-hire portal is the state agency website Within 20 days of hire date The UI registration portal is
On the wage side, Illinois applies a flat statutory rate that the legislature revisits periodically. $15.00 per hour effective January 1, 2025 (unchanged in 2026); tipped employees $9.00 (60% of minimum wage); youth under 18 working under 650 hours/year: $13.00. Authority:.
After payroll and registration come three deeper statutory rules in Illinois. Workers' compensation: 1 E-Verify obligation: No, Illinois law does not require private employers to use E-Verify, but its use is regulated. At-will employment status: At common law and in Illinois today, a noncontracted employee is one who serves at the employer's will, and the employer may discharge such an employee for any reason or no reason.
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Relevant Documents
In Illinois the hire-side document stack runs from federal Form I-9 through Form W-4 (federal) and the Illinois state withholding addendum (where applicable), then the Illinois new-hire report via the state agency (Within 20 days of hire date), then workers' compensation enrollment paperwork (1).
Employee Handbook
A comprehensive document outlining company policies, procedures, work rules, benefits, and expectations. Provides important information to new employees and serves as a reference for all staff.
Employment Application Form
A standardized form for collecting information from job applicants including work history, education, skills, and references. This helps employers make informed hiring decisions and serves as documentation of the hiring process.
Employment Contract
A comprehensive legal agreement between employer and employee detailing all terms and conditions of employment including duties, compensation, benefits, termination procedures, and confidentiality requirements.
Employment Offer Letter
A formal document outlining the terms of employment including position, salary, benefits, start date, and other conditions. This establishes clear expectations and serves as evidence of the employment agreement.
Non-Compete Agreement
A contract that restricts an employee from working for competitors or starting a competing business for a specified period after employment ends. Enforceability varies significantly by state.
Non-Disclosure Agreement
Protects your confidential information, trade secrets, and intellectual property that you may need to share with the manufacturer during the course of your relationship. This should be signed before detailed discussions begin.
Relevant Laws
Illinois Human Rights Act
Prohibits employment discrimination based on race, color, religion, sex, national origin, ancestry, age, marital status, physical or mental disability, military status, sexual orientation, or unfavorable discharge from military service. Employers must ensure their hiring practices don't discriminate against protected classes.
Illinois Right to Privacy in the Workplace Act
Prohibits employers from discriminating against applicants based on their use of lawful products (such as tobacco or alcohol) during non-working hours and off the employer's premises. Also restricts employers from requesting social media passwords from applicants.
Illinois Equal Pay Act
Prohibits employers from paying unequal wages to men and women for doing the same or substantially similar work. As of 2019, employers cannot ask about salary history during the hiring process to help prevent perpetuating wage discrimination.
Illinois Employment Record Disclosure Act
Regulates what information employers can disclose about current or former employees. Relevant during the hiring process when checking references and employment history.
Illinois Job Opportunities for Qualified Applicants Act (Ban the Box)
Prohibits employers with 15 or more employees from asking about criminal history on initial job applications. Background checks can only be conducted after an applicant has been determined qualified and notified of an impending interview or conditional job offer.
Illinois Wage Payment and Collection Act
Regulates when and how employees must be paid, including final compensation upon separation. When hiring, employers must clearly communicate pay periods, methods of payment, and other wage-related policies.
Illinois Employee Classification Act
Addresses proper classification of workers as employees versus independent contractors. Misclassification can lead to significant penalties, so employers must understand the legal distinction when bringing on new workers.
Regional Variances
Chicago and Cook County
Chicago has its own minimum wage ordinance that is higher than the Illinois state minimum wage. Employers in Chicago must also comply with the Chicago Fair Workweek Ordinance, which requires advance notice of work schedules for employees in certain industries. Additionally, Chicago has its own paid sick leave requirements that may differ from state law.
Cook County has its own minimum wage and paid sick leave ordinances that may apply to employers in municipalities that have not opted out. Many municipalities within Cook County have opted out of these ordinances, creating a patchwork of regulations that employers must navigate carefully.
Other Major Cities
Evanston has adopted its own minimum wage ordinance that follows Cook County's minimum wage requirements. Employers in Evanston must also comply with the city's paid sick leave ordinance.
Skokie follows Cook County's minimum wage and paid sick leave ordinances, creating different requirements than neighboring municipalities that may have opted out.
Enterprise Zones
Illinois has designated certain areas as Enterprise Zones that offer tax incentives and other benefits to employers who hire residents from these zones. These incentives may affect hiring decisions and paperwork requirements for new employees.
Suggested Compliance Checklist
File the federally-required new-hire report
On hire days after startingThe Illinois portal is the state agency website Within 20 days of hire date
Activate an employer UI tax account in Illinois
Before first payroll days after startingRegistration runs
File Form I-9 for the new hire on day one of work (employee section) and within 3 business days for the employer section
Before first hire days after startingRetention rule: 3 years after hire or 1 year after termination, whichever is later.
Check the workers' compensation employer-count threshold for Illinois
On hire days after starting1
Run withholding setup at hire
On hire days after startingFederal Form W-4 is required for every employee. The Illinois state withholding addendum (where the state operates a separate income-tax withholding regime) is required in addition.
Determine whether E-Verify enrollment is required or optional in Illinois
Before hire days after startingNo, Illinois law does not require private employers to use E-Verify, but its use is regulated.
Display the Illinois mandatory employment posters at the worksite
Before first hire days after startingYour Rights Under Illinois Employment Laws
Document the at-will employment posture in the offer letter and any employee handbook
Before hire days after startingIn Illinois: At common law and in Illinois today, a noncontracted employee is one who serves at the employer's will, and the employer may discharge such an employee for any reason or no reason.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| File the federally-required new-hire report | The Illinois portal is the state agency website Within 20 days of hire date | - | On hire |
| Activate an employer UI tax account in Illinois | Registration runs | - | Before first payroll |
| File Form I-9 for the new hire on day one of work (employee section) and within 3 business days for the employer section | Retention rule: 3 years after hire or 1 year after termination, whichever is later. | - | Before first hire |
| Check the workers' compensation employer-count threshold for Illinois | 1 | - | On hire |
| Run withholding setup at hire | Federal Form W-4 is required for every employee. The Illinois state withholding addendum (where the state operates a separate income-tax withholding regime) is required in addition. | - | On hire |
| Determine whether E-Verify enrollment is required or optional in Illinois | No, Illinois law does not require private employers to use E-Verify, but its use is regulated. | - | Before hire |
| Display the Illinois mandatory employment posters at the worksite | Your Rights Under Illinois Employment Laws | - | Before first hire |
| Document the at-will employment posture in the offer letter and any employee handbook | In Illinois: At common law and in Illinois today, a noncontracted employee is one who serves at the employer's will, and the employer may discharge such an employee for any reason or no reason. | employment-offer-letter | Before hire |
Frequently Asked Questions
In Illinois, the E-Verify posture for private employers is: No, Illinois law does not require private employers to use E-Verify, but its use is regulated. Federal contractors with a FAR E-Verify clause must still use E-Verify regardless of state law.
Illinois requires the new-hire report to be filed Within 20 days of hire date. The state portal is the state agency website. The federal anchor for the report itself is the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996.
$15.00 per hour effective January 1, 2025 (unchanged in 2026); tipped employees $9.00 (60% of minimum wage); youth under 18 working under 650 hours/year: $13.00
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