State file — Illinois

Severance in Illinois: the rules on your way out

Severance itself is almost never required by law — but the paper around your exit is. In Illinois, three state rules shape your negotiation: when your last paycheck must arrive, whether a non-compete can follow you to your next job, and what notice a layoff required. If you are 40 or older, the federal clocks (21 or 45 days, plus 7 days to change your mind after signing) apply on top of everything here.

Your thinking-it-over clock in Illinois

State clock exists but is narrow: under the Workplace Transparency Act, a settlement or termination agreement that includes confidentiality about alleged unlawful employment practices is enforceable only if (among other conditions) the employee is given 21 calendar days to consider it and, unless knowingly/voluntarily waived, 7 calendar days after signing to revoke it; confidentiality must be the employee's documented preference, with separate consideration and written notice of the right to have an attorney review it. For a severance agreement with no such confidentiality clause, federal rule only.

Illinois also sets its own clock: Illinois law (Workplace Transparency Act): for a termination or settlement agreement's confidentiality terms about alleged unlawful employment practices to be enforceable, you must be given 21 days to consider and 7 days after signing to revoke. 21 days to consider. The checker applies it automatically — the later of your two dates is the safer one to work to.

Run the deadline checker — it counts the federal clock and Illinois's clock together and gives you the dates.

Non-competes in Illinois: restricted — enforceable only within limits

Freedom to Work Act: a non-compete is void unless the employee's actual or expected annualized earnings exceed $75,000/year (rising to $80,000 on Jan. 1, 2027, $85,000 in 2032, $90,000 in 2037); a non-solicit is void at or below $45,000/year (rising to $47,500 in 2027). Also void for employees covered by a CBA under the Illinois Public/Educational Labor Relations Acts, and for employees laid off/furloughed due to COVID-like business circumstances unless the employer pays base salary during enforcement. Employer must advise the employee in writing to consult an attorney and give at least 14 calendar days to review the covenant. Above the threshold, enforceability still requires a legitimate business interest and reasonableness. Applies to agreements entered on/after Jan. 1, 2022.

Why it matters at the exit table: a non-compete you sign on the way out can matter more than the severance check. If the clause would block your next job, narrowing it is one of the most common — and most granted — negotiation asks.

Your last paycheck in Illinois

Pay final compensation in full at separation if possible, and in no case later than the next regularly scheduled payday — same rule whether fired, laid off, or quit.

Unused vacation: Must pay the monetary equivalent of all earned vacation as part of final compensation at the final rate of pay; no policy may forfeit earned vacation on separation (unless a collective bargaining agreement provides otherwise).

Final pay is owed whether or not you sign anything. If the date passes without your money, your state labor agency takes these complaints — and many states add penalties for every day of delay.

Layoff notice in Illinois

Illinois has its own layoff-notice law (a mini-WARN law): Illinois WARN Act: employers with 75+ full-time employees (or 75+ employees working 4,000+ aggregate hours/week excl.

Notice failures have their own remedies (back pay for each day of missed notice, in the federal law's case) — separate from the severance agreement, and worth a question if your layoff was large and sudden.

Before you sign, run the whole paper

Included in the $49 SeveranceDecoded Kit

  • The clause-by-clause decoder — every clause in plain words: what it means, what to look for, the exact questions to raise
  • The paperwork audit (the legal checklist) — every item the law names for workers 40+, checked against your documents
  • The group layoff list audit (Exhibit A) — titles and ages of who was picked and who was not, checked line by line. No other tool does this
  • The negotiation playbook — what companies actually move on (money, dates, stock deadlines, the non-compete, your reference) and the words that move them
  • Ready-to-send scripts: asking for more time, asking for changes, and the change-your-mind letter (revocation)
  • The red-flag page — the short list of facts that mean a lawyer's paid hour is worth it, and how to find one who does this daily
Get the SeveranceDecoded Kit — $49

One payment. Yours to keep. Works for any severance agreement, any state.

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