Chicago Business Attorney Blog
Illinois has spent the last two years rewriting the rules on what employers and businesses are allowed to put in a contract. Most of the changes did not arrive as one big headline. They arrived quietly, amendment by amendment, and a lot of business owners are still operating on paperwork that was compliant when it was signed and is not compliant anymore.
Here is the uncomfortable part. Several of these changes carry deadlines landing right around January 1, 2027. If your contracts have not been reviewed since before this wave of legislation, you are not looking at a minor cleanup. You are looking at agreements that could be unenforceable, or worse, that could expose your business to penalties, attorneys’ fees, and Attorney General enforcement action. Here are the five contracts to get in front of before that date arrives.
Number 1: Non-Compete and Non-Solicitation Agreements
Illinois raises the minimum salary thresholds for restrictive covenants on a set schedule, and the next increase lands January 1, 2027 . Non-compete agreements will require a minimum salary of 80,000 dollars, up from the current 75,000. Non-solicitation agreements will require a minimum salary threshold increase as well. If an employee earns even one dollar under the applicable threshold, Illinois courts generally treat the entire restrictive covenant as void, not just unenforceable in part.
This matters most for businesses with employees sitting close to those numbers today. A raise you were already planning, a promotion, or a compensation adjustment could push someone over the line, or a contract signed under the old threshold could quietly become worthless the moment the calendar flips. Illinois also allows employees who successfully challenge an unlawful restrictive covenant to recover their attorneys’ fees, and the Attorney General has independent authority to go after businesses with a pattern of overly broad agreements. Review every non-compete and non-solicitation agreement against the incoming thresholds now, not after an employee departs and takes the question to court.
Number 2: Employment Agreements, Offer Letters, and Onboarding Paperwork
Amendments to the Illinois Workplace Transparency Act took effect January 1, 2026, and they apply to any employment agreement signed, renewed, or modified on or after that date. The law now restricts far more than it used to. Employers can no longer require employees to accept terms that shorten the statute of limitations on a claim, force the use of another state’s law for an Illinois based dispute, or push adjudication of Illinois claims outside the state, unless very specific conditions around mutual negotiation and separate consideration are met.
If your standard offer letter or employment agreement template has not been updated since before 2026, it likely contains at least one of these now prohibited provisions. Every new hire you bring on, and every existing agreement you renew or modify, needs to run through an updated template, not the one sitting in your HR drive from a few years ago.
Number 3: Severance, Separation, and Settlement Agreements
This is the one that catches business owners off guard most often, because separation paperwork tends to get reused verbatim for years without a second look. Under the amended Workplace Transparency Act, confidentiality provisions in separation and settlement agreements are only enforceable if they are backed by separate, bargained for consideration, distinct from whatever the employee is already receiving for releasing claims. A confidentiality clause that simply rides along with a standard severance payment, the way most templates have handled it for years, is now vulnerable to challenge.
The fix is not complicated, but it does require rewriting the template, not just editing a paragraph. Every separation or settlement agreement your business uses needs its confidentiality language restructured so the consideration is clearly distinct and clearly documented.
Number 4: Independent Contractor and Freelance Agreements
If your business works with freelancers, the Freelance Worker Protection Act requires a written contract for the engagement, and it requires the hiring business to retain that contract for at least two years and provide a copy to the freelancer. Businesses that have historically handled freelance relationships on a handshake, an email thread, or an informal invoice arrangement are now out of compliance the moment that relationship crosses the law’s thresholds.
This is an easy one to fix and an easy one to overlook, precisely because freelance engagements often feel low stakes compared to full employment relationships. They are not low stakes under this law. Get a compliant written agreement in place for every freelancer your business currently uses, and build the recordkeeping habit now so it becomes standard practice rather than a scramble later.
Number 5: Staffing Agency and Temporary Labor Contracts
If your business brings in workers through a temporary staffing agency, amendments to the Day and Temporary Labor Services Act place safety hazard disclosure obligations directly on your business as the third-party client, not just on the staffing agency. Your contracts with staffing agencies need to reflect who is responsible for identifying and communicating workplace hazards and providing appropriate training, because the law now expects both parties to have that obligation addressed rather than assuming it falls entirely on the agency.
If your staffing agreements predate this amendment, they likely do not allocate this responsibility clearly, which leaves your business exposed if a safety issue arises and the paperwork does not show who was supposed to handle it.
What to Do Before the Deadline Hits
None of these five fixes require blowing up your existing contract library and starting over. They require a focused review, one agreement type at a time, against what actually changed. The businesses that get caught are almost never the ones who never had good contracts. They are the ones who had good contracts once and never updated them as the law moved.
If you have not had your employment agreements, restrictive covenants, separation paperwork, freelance contracts, and staffing agreements reviewed since these changes started rolling out, the smart move is doing it now, while there is still time to fix templates before the next round of new hires, renewals, or departures forces the question.
About George Bellas
George Bellas is a business attorney at Bellas & Wachowski in Chicago, where he helps Illinois business owners keep their contracts current as employment and business law continues to shift. From non-compete thresholds to separation agreement language, George works with clients to review existing paperwork and rebuild templates so they hold up under current law rather than the law as it stood when they were first drafted. If your business contracts have not been reviewed recently, schedule a consultation with George Bellas today at 800.825.9260 or visit bellas-wachowski.com.