Federal & State Regulations | Employment contracts - Illinois

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Summary of differences between federal and state regulations

Federal law generally does not regulate employment contracts between employers and employees with one exception: contracts that require the joining or refraining from joining of a labor union as a condition of employment. On the federal level, these contracts are governed by the National Labor Relations Act. States may have a corresponding provision and may also have additional provisions regarding employment contracts.

Illinois has a law similar to federal regarding union membership. It also has additional provisions.

Union membership

Illinois law provides that an employer can not enter into a contract with an employee or job applicant requiring that individual to refrain from joining or remaining a member of a labor union as a condition of obtaining employment or of continued employment. 820 ILCS 15/1

Vacation payout

Whenever a contract of employment provides for paid vacations and an employee resigns or is terminated before all earned vacation is taken, the employee must be paid for all vacation time earned upon final payment of wages. No employment contract can provide for forfeiture of earned vacation upon the employee’s separation. 820 ILCS 115/5

Inventions

A provision in an employment agreement which provides that an employee will assign the employee’s rights in an invention to the employer does not apply to an invention for which no equipment, supplies, facilities, or trade secret information of the employer was used and which was developed entirely on the employee's own time, unless the invention relates to the employer’s business or anticipated research and development, or the invention is a result of the employee’s work for the employer. Any employment agreement entered into must contain a statement to this effect. 765 ILCS 1060/2