Hiring employees in Illinois: the 2026 compliance checklist for employers and recruiters

As of October 2026, an employer hiring in Illinois has to register with the Department of Employment Security (IDES) within 30 days of start-up, carry workers' compensation for almost everyone it hires, post pay scales and benefits in job ads once it has 15 or more employees, hold criminal history questions until a candidate is selected for an interview, get consent before recording an interview, collect Form IL-W-4, tell the new hire the rate of pay and the time and place of payment, and report the hire, including independent contractors, within 20 days. Illinois also bans salary history questions and most credit checks, and since January 1, 2026 its Human Rights Act covers discriminatory AI and requires notice when AI is used.

This page is the Illinois hub: one table with every item and its official source, then a short section on each. Where we already have a full guide to an item, the section summarizes it and links there.

The Illinois hiring checklist at a glance

What must be in place before the first Illinois hire?

An IDES account. IDES says newly created businesses "must register with IDES within 30 days of start-up," online through MyTax Illinois or on Form REG-UI-1. Withholding of state income tax is a separate account with the Illinois Department of Revenue.

Workers' compensation comes first-day. The Workers' Compensation Commission says "Illinois law requires employers to provide workers' compensation insurance for almost everyone who is hired," and an employer that knowingly goes without "may be fined up to $500 for every day of noncompliance, with a minimum fine of $10,000." The federal layer (an EIN, Form W-4 and Form I-9 by the third business day) applies on top.

Does a staffing or recruiting agency need an Illinois license?

Often, yes. Illinois licenses private employment agencies statewide under the Private Employment Agency Act through the Department of Labor, and regulates day and temporary labor service agencies separately under the Day and Temporary Labor Services Act. Chicago adds its own day labor agency license, and home care placement can need a Department of Public Health license. Our guide to the Illinois staffing agency license explains which layer applies.

What must an Illinois job posting include, and can you ask about pay history?

Employers with 15 or more employees must include the pay scale and benefits in every specific job posting for a role that touches Illinois, under the Equal Pay Act as amended effective January 1, 2025; the Department of Labor enforces it with tiered penalties. 820 ILCS 112/10 bars employers and employment agencies from screening on, requiring or asking for salary history, and unlike California, Illinois protects an employer only if it does not consider a figure the candidate volunteers. See Illinois pay transparency law and the Illinois salary history ban.

When can you ask about criminal history or run a credit check?

The Job Opportunities for Qualified Applicants Act bars an employer with 15 or more employees, or an employment agency, from asking about criminal history until the applicant has been judged qualified and told they are selected for an interview, or, with no interview, until after a conditional offer. The Human Rights Act, 775 ILCS 5/2-103.1, then requires a substantial relationship or unreasonable risk, an assessment of listed factors, and written notices with at least five business days to respond. See Illinois ban-the-box law.

The Employee Credit Privacy Act bars an employer from asking about credit history or ordering a credit report unless satisfactory credit is a bona fide occupational requirement, for example bonding required by law, access to $2,500 or more in cash or marketable assets, signatory power of $100 or more per transaction, or a managerial role. Chicago has a parallel rule; see our credit check laws guide.

Can you record or transcribe a job interview in Illinois?

Openly, with consent. 720 ILCS 5/14-2(a)(2) makes it a felony to record a private conversation "in a surreptitious manner" without the consent of all other parties, and it applies to participants. An interview recorded or transcribed after everyone is told and agrees is outside the offense; a first offense is a Class 4 felony, and those recorded can sue. See Illinois recording consent law for interviews and our consent script.

Does Illinois regulate AI in hiring?

Yes, twice. Public Act 103-0804 (HB 3773), effective January 1, 2026, made it a civil rights violation under the Human Rights Act to use AI that has the effect of discriminating on a protected basis, to use zip codes as a proxy, or to fail to give notice that AI is being used; the Department of Human Rights withdrew its proposed notice rules in 2026, so the duty applies without final guidance. Separately, the Artificial Intelligence Video Interview Act has required notice, an explanation and consent before AI analyzes a recorded video interview since 2020. See Illinois HB 3773 and the AI Video Interview Act.

Can you drug test applicants in Illinois?

Yes, with cannabis rules. The Cannabis Regulation and Tax Act, 410 ILCS 705/10-50, lets employers adopt "reasonable zero tolerance or drug free workplace policies" applied in a nondiscriminatory manner, and protects actions taken under a reasonable policy, including "withdrawal of a job offer due to a failure of a drug test." The Right to Privacy in the Workplace Act separately protects lawful off-duty use of lawful products. Our drug testing laws guide explains how the two interact.

Does Illinois require E-Verify?

No. Illinois has no E-Verify mandate, and Public Act 104-0455, law since December 12, 2025, repealed the Right to Privacy in the Workplace Act's E-Verify sections, so the older Illinois notice and training rules no longer apply. Federal contractors with the FAR clause still enroll. See E-Verify requirements in Illinois.

Which state withholding form does a new hire complete?

Form IL-W-4, Employee's and other Payee's Illinois Withholding Allowance Certificate. The form says to give it to the employer "on or before the date you start work," and that if an employee does not file a completed form, the "employer must withhold Illinois Income Tax on the entire amount of your compensation, without allowing any exemptions." The form points residents of Iowa, Kentucky, Michigan or Wisconsin, and military spouses, to Form W-5-NR to see whether they are exempt from Illinois withholding.

Which notices must a new Illinois employee get at hire?

• Pay terms. 820 ILCS 115/10 says employers "shall notify employees, at the time of hiring, of the rate of pay and of the time and place of payment," and "whenever possible, such notification shall be in writing and shall be acknowledged by both parties."
• AI notice. If AI is used in recruitment, hiring or other employment decisions, the Human Rights Act notice duty above.
• Non-compete and non-solicit terms. Under the Freedom to Work Act, a covenant is void unless the employee is advised in writing to consult a lawyer and given at least 14 calendar days to review it, and earnings thresholds apply. See Illinois non-compete law.
• Criminal record notices. Only if a conviction drives a rejection, as above.

How do you report a new hire in Illinois?

Under 820 ILCS 405/1801.1, each employer files a report with IDES "not later than 20 days after the date the employer hires the employee," giving the employee's name, address and Social Security number, the date services were first performed for pay, and the employer's name, address and FEIN. A newly hired employee includes "an individual under an independent contractor arrangement" and anyone rehired after a separation of at least 60 consecutive days. Reports go to IDES online, by fax or by mail, ideally on the W-4. The civil penalty is $15 for each individual an employer knowingly fails to report.

The Illinois hiring steps in order

1. Before the first hire: register with IDES and the Department of Revenue, and bind workers' compensation. Agencies confirm their license or registration.
2. Posting: include the pay scale and benefits if you have 15 or more employees.
3. Screening: no salary history, no credit check unless the role qualifies, and no criminal history until the candidate is selected for an interview.
4. Interview: record or transcribe only openly and with consent; give notice of any AI use and get consent before AI analyzes a video interview.
5. Offer: follow the Human Rights Act assessment and notices for any conviction; drug test under a reasonable written policy.
6. First day: Form I-9, W-4, IL-W-4, and written pay terms acknowledged by both sides; give any non-compete 14 days for review.
7. Within 20 days: report the hire, and any independent contractor, to IDES.

Hiring in more than one state? The same checklist is available for California, Texas, Florida, New York, Pennsylvania and Ohio.