Business & Work

Most workers in Illinois are “at-will” employees. This generally means an employer can fire or lay off an employee at any time, with or without a reason. However, there are important exceptions. An employer cannot fire or lay off a worker for an illegal reason. A worker may also have additional protections because of:

• An employment contract,
• A union collective bargaining agreement,
• Federal, state, or local anti-discrimination laws,
• Laws protecting workers from retaliation,
• The employer’s written policies, or
• Laws that protect a worker’s job in certain situations, such as the Family and Medical Leave Act (FMLA) or the Worker Adjustment and Retraining Notification (WARN) Act.

An employer cannot fire, lay off, or otherwise treat a worker differently because of a characteristic protected by federal, state, or local discrimination laws. A worker who believes discrimination played a role in the employer’s decision may be able to file a discrimination complaint. Learn more about the prohibited categories of discrimination and where to report workplace discrimination.

An employer cannot fire or punish a worker for exercising certain legal rights. This is called retaliation. For example, a worker may be protected for:

• Reporting discrimination or harassment,
• Complaining about unpaid wages or workplace safety,
• Requesting or taking legally protected leave,
• Filing a complaint with a government agency, or
• Participating in an investigation of a workplace complaint.

Retaliation can include being fired, demoted, disciplined, or having pay or hours reduced.

Not every workplace complaint is protected from retaliation. The complaint generally must involve a right or activity protected by law. A worker who reports a problem can also still be fired or disciplined for a legitimate reason that is unrelated to the complaint.

A worker may qualify for unemployment benefits if they become unemployed through no fault of their own. Being fired does not automatically prevent a worker from getting unemployment benefits. However, a worker may be denied benefits if they were fired for misconduct.

Different rules apply when a worker quits. They may still qualify for unemployment benefits if they had a legally recognized good cause for leaving. Workers must apply for unemployment benefits through the Illinois Department of Employment Security (IDES).

Employees are usually not entitled to severance pay. Generally, you’re not entitled to extra pay beyond the hours you work. However, an agreement such as an individual employment contract, a union collective bargaining agreement, or a company handbook may have severance provisions that the company has to follow.

Also, many times a company will offer an employee a severance agreement before they are fired. Usually, the company wants to pay a severance in exchange for you agreeing not to take legal action. If you are offered a severance or separation agreement, you should read it carefully. Before signing, consider any rights you may be giving up. You also may be able to negotiate better terms with the company.

An employer should pay a worker’s final compensation in full when their employment ends, if possible. At the latest, the employer must pay it by the worker’s next regularly scheduled payday. Final compensation includes:

• Unpaid wages or salary,
• Overtime,
• Earned commissions,
• Earned bonuses,
• Earned vacation or PTO that must be paid out, and
• Other compensation the worker has already earned.

If a worker is paid by the hour, they must be paid for all hours worked, including any overtime. If a worker is a salaried employee and their employment ends before the end of a workweek, the employer may pay only the salary earned through the worker’s last day of employment, rather than the salary for the entire workweek.

If your employer does not pay all the compensation you are owed, learn how to start a case to recover unpaid wages and other compensation. 

It depends on the type of leave and the employer’s policy. If an employer provides earned vacation time or a general paid time off (PTO) bank, the worker may be entitled to payment for unused earned vacation or PTO when their employment ends.

The Illinois Paid Leave for All Workers Act (PLAWA) allows workers to earn up to 40 hours of paid leave per year, accrued at a rate of 1 hour of paid leave for every 40 hours worked. You can use the leave for any reason, and employers cannot require you to say why you are taking the time off. Generally, this type of paid leave, if accrued, does not need to be paid out when your employment ends unless it is part of a vacation bank general paid time off or PTO bank. If you work in Chicago, elsewhere in Cook County, or in certain other Illinois counties, you may be eligible for similar but separate paid leave benefits.

The Consolidated Omnibus Budget Reconciliation Act, also known as COBRA, gives certain workers and their families the option to temporarily continue their employer-sponsored group health coverage after certain events that would otherwise cause them to lose coverage. These events can include:

• Job loss, other than termination for gross misconduct,
• Reduction in the hours worked,
• Death of a covered employee,
• Divorce, or
• Other qualifying life events.

Federal COBRA usually applies to private employers with 20 or more employees and to state and local governments. If you qualify, you and certain family members can keep the same health insurance after losing coverage.

COBRA typically lasts up to 18 months after job loss or reduced hours. You usually have 60 days to choose COBRA after getting notice. You pay the full cost of the plan plus up to a 2% fee.

If you don’t qualify for COBRA, you may still have other options, such as Illinois continuation coverage, a spouse’s or family member’s plan, or coverage through the Health Insurance Marketplace.

Employers do not always use the terms “layoff” and “furlough” consistently. Generally, a layoff means the employment relationship ends, while a furlough is a temporary period without work or with reduced work while the employment relationship continues.

If you are laid off, your employer generally does not expect you to return to your job, although you could be rehired later. If you are furloughed, you remain an employee and your employer generally expects you to return to your regular work schedule. However, a furlough does not guarantee that you will return to work. An employer may later decide to extend the furlough or lay you off.

Your rights during a furlough depend on your circumstances. A furloughed employee may be entitled to:

• Unemployment benefits,
• A final paycheck that includes all compensation earned for hours worked,
• A full weekly salary for the last week worked, if the employee is salaried and applicable law requires it,
• A final paycheck by the last day of work or, at the latest, the next regular payday, and
• A COBRA notice explaining how to continue health insurance coverage.

A worker who is represented by a union and covered by a collective bargaining agreement (CBA) may have additional rights. For example, a CBA may provide:

• Seniority rights,
• Layoff or recall procedures,
• Severance,
• Advance notice,
• A requirement that an employer have “just cause” to fire a worker, or
• A grievance process for challenging a termination.

A union worker should review their CBA and contact their union representative if they believe the employer violated the agreement.

Certain employers are required to give advance warning about layoffs. In Illinois, both the federal and state Worker Adjustment and Retraining Notification Acts (WARN Acts) apply. Both WARN Acts require certain employers to notify workers 60 days in advance of “plant closings” or “mass layoffs.”

The Illinois WARN Act covers employers with at least 75 full-time employees. For the Federal WARN, it’s 100.

The Illinois WARN Act requires notice if at least 25 full-time employees are laid off and that layoff amounts to at least one-third of the full-time employees at a site. It’s 50 for the Federal version.

A layoff of 250 full-time employees at a single site, regardless of what percentage of the workforce that is, also triggers the 60 days' notice under the Illinois WARN Act. Under Federal law, it’s 500.
Under both, if a layoff that was supposed to be for less than 6 months extends beyond 6 months, it’s an “employment loss” that triggers the notice requirement.

Employers also must notify workers if a plant closes or relocates, depending on how many workers are affected. A plant typically counts as relocating when it moves and does not offer workers transfers that would allow them to continue working with no more than a six-month break in employment. 

Under both Acts, an employer who violates the law by laying off without giving proper notice is liable to each laid off employee for up to 60 days of back pay and benefits.

There are three exceptions when an employer doesn’t have to give 60 days' notice. For example, in certain circumstances, a “faltering company” doesn’t have to give a full 60 days’ notice if notice would scare off investors or lenders who might save the company. And a full 60 days’ notice isn’t required if the layoff or shutdown is unforeseeable, or results from a natural disaster. Companies in these situations should still give as much notice as possible.

The WARN laws are complicated. Learn more on the US Department of Labor's website.