Severance Pay Calculator — Illinois

Severance Pay Laws in Illinois

Illinois has its own mini-WARN statute — the Illinois Worker Adjustment and Retraining Notification Act, codified at 820 ILCS 65 — which lowers the federal coverage thresholds. Illinois WARN applies to employers with 75 or more full-time employees (vs. 100 under federal WARN) and is triggered by mass layoffs of 25 or more workers when those workers represent at least one-third of the workforce, or by any mass layoff of 250 or more workers. The required notice period is sixty days, matching the federal floor, and failure to give notice triggers back pay and benefits for each day of the deficient notice up to sixty days, plus civil penalties of up to $500 per day.

On non-competes, Illinois has gone further than most states. The Illinois Freedom to Work Act, amended substantially in 2022, prohibits employee non-competes for any worker earning less than $75,000 per year (indexed up to $90,000 by 2037), and prohibits customer or employee non-solicit clauses for workers earning under $45,000. For employees above those thresholds, non-competes must be reasonable in scope, supported by adequate consideration, and accompanied by fourteen days of review time and a written advisory to consult an attorney. Courts will void rather than reform clauses that fail these tests.

Illinois final pay rules are governed by the Illinois Wage Payment and Collection Act, 820 ILCS 115. Final wages, including accrued vacation that is payable under company policy, must be paid by the next regular payday following termination. The statute provides liquidated damages of two percent per month for unpaid wages and a private right of action that includes attorney's fees, which gives employees meaningful leverage if a final paycheck is delayed.

The Illinois Human Rights Act applies to all employers regardless of size — broader than federal Title VII's fifteen-employee threshold — and provides discrimination, harassment, and retaliation protections across a wide range of protected categories. The Illinois Department of Human Rights administers claims, with the Human Rights Commission adjudicating contested cases. Chicago and Cook County have additional local ordinances affecting paid sick leave, fair work week scheduling, and wage theft enforcement.

For employees forty and over signing a separation agreement, the federal ADEA provides a 21-day review window (45 days in group layoffs) and a 7-day revocation period. Illinois courts apply ADEA standards plus state knowing-and-voluntary requirements through case law. The Workplace Transparency Act (2020) limits the enforceability of confidentiality and non-disparagement clauses where they would cover unlawful workplace conduct.

How Much Severance Are Illinois Workers Owed?

Illinois employers in finance, tech, and manufacturing typically offer two to three weeks of severance per year of service for individual contributors, with Chicago-based packages running higher in finance and consulting. Healthcare and government come in closer to the modeled midpoint, and retail and hospitality below it. Managers and directors negotiate substantially higher, and Illinois WARN coverage adds a floor of sixty days of pay-in-lieu for any covered layoff that skipped notice.

LayoffMath surfaces the dollar gap between the modeled typical range and your offer. In Illinois, the Freedom to Work Act limits on non-competes mean your future earning potential is largely preserved post-termination, which reduces what an employer needs to offer in lump-sum severance to make you whole.

Industry Benchmarks for Illinois

In Illinois, Chicago finance and consulting employees typically negotiate above the modeled midpoint; downstate manufacturing and retail come in below.

Frequently Asked Questions — Illinois Severance