The Illinois non-compete law is the Freedom to Work Act, 820 ILCS 90. It limits two promises an employer may ask for. A non-compete restricts working for others after the job. A non-solicit restricts approaching the employer's clients, vendors or staff. Employees, courts and the Illinois Attorney General enforce it. This page is for owners of Illinois businesses with ties to Canada or India, such as a foreign-owned company hiring its first Illinois employees.
Who does the Illinois non-compete law cover?
| Question | Answer |
|---|---|
| Employer | An individual, partnership, corporation, LLC or business trust with at least one employee on some day in a calendar year. Government bodies are excluded. |
| Earnings | Taxable pay shown, or expected to be shown, on Form W-2 (salary, earned bonuses, commissions), plus elective deferrals such as 401(k), HSA and commuter deductions. |
| Floors, 2026 | More than $75,000 for a non-compete; more than $45,000 for a non-solicit. |
| Other limits | COVID-type layoffs, certain collective bargaining agreements (non-competes only), construction (with exceptions), and mental health care for veterans and first responders. |
| Not a non-compete | Confidentiality and trade-secret agreements, sale-of-business covenants, paid notice periods, no-rehire clauses. |
The Act applies to covenants entered into after January 1, 2022. Older ones raise a legal question.
What does it mean for a foreign-owned or cross-border business?
| Situation | What the law says | What to check |
|---|---|---|
| Illinois company owned from Canada or India | The employer definition lists kinds of business and at least one employee. It states no nationality test. | An attorney confirms whether the arrangement fits. |
| Worker paid through a foreign payroll or working remotely | Earnings are tied to Form W-2 reporting. | How such pay counts, and whether the Act reaches a remote worker, are legal questions we did not research. |
| Buyer of a U.S. business with a seller's promise not to compete | Sale-of-business covenants are left out of the Act's definition of a non-compete. For tax, a covenant entered in connection with buying a business is amortized over 15 years (section 197). | Court treatment was not researched; your attorney handles that, and we handle the tax. |
Where to go next
The rules and checklist page covers requirements, numbers, changes and the Floor-and-Fortnight Read, facts to gather before an attorney reviews an agreement. For first-hire duties, see the employer compliance checklist, the Illinois payroll guide and our Wage Payment and Collection Act page.
Official sources
- Illinois General Assembly: Freedom to Work Act, 820 ILCS 90
- Illinois General Assembly: Minimum Wage Law, 820 ILCS 105 (employer definition)
- Cornell Law School Legal Information Institute: 26 U.S.C. 197
- Federal Trade Commission: FTC files to accede to vacatur of the Non-Compete Clause Rule (September 5, 2025)
- Federal Register: Removal of the Non-Compete Rule, 91 FR 6507 (February 12, 2026)
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.