Independent Contractor Agreements in Illinois

Illinois applies an ABC-style test

For unemployment insurance and, in the construction industry, under the Employee Classification Act, Illinois uses an ABC-style standard rather than the looser common-law control test. The worker is presumed to be an employee unless the hiring party shows the worker is free from control, performs work outside the usual course of the business or away from its places of business, and is engaged in an independently established trade or business. As with California, this is harder to satisfy than a simple control test.

Construction has its own rules

The Illinois Employee Classification Act targets the construction industry specifically. It presumes construction workers are employees and imposes penalties for misclassification. If you are hiring for construction or trade work in Illinois, do not rely on a general contractor arrangement without checking that Act's requirements.

What to put in the agreement

An Illinois independent contractor agreement should set out scope of work, payment terms, ownership of work product, confidentiality, and termination. Because Illinois can apply the stricter ABC-style test, the arrangement should genuinely reflect a contractor who controls their own work, operates their own business, and serves other clients. Contractors are responsible for their own federal and Illinois state taxes.

Frequently Asked Questions

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