Illinois Unemployment Insurance Law Handbook

August 2023

Illinois Unemployment

Insurance Law Handbook

Contents

Click on one of the links below:

Guide To The Unemployment Insurance Act

Statutes:

• Illinois Unemployment Insuran

ce Act

• Healthcare Worker Background Check Act

• New Hire Reporting Act

Rules Of The Illinois Department Of Employment Security

Digest Of Adjudication Precedents

Selected IDES Forms

Disclaimer

GUIDE TO THE ILLINOIS U. I. ACT Table

G-i (5/19)

TABLE OF CONTENTS

. INTRODUCTION ................................................................................................................................................................ G-1

II. EMPLOYER’S RESPONSIBILITIES TO WORKERS ..................................................................................................... G-2

A. Information Required to Be Given to Workers ................................................................................................................... G-2

B. Notice to Partially Unemployed Workers ............................................................................................................................ G-2

III.

EMPLOYER LIABILITY UNDER THE UNEMPLOYMENT INSURANCE ACT ....................................................... G-4

A. Employers of “One or More in Twenty Weeks” or with $1,500 Quarterly Payroll............................................................. G-4

B. Employer Liability by Succession ....................................................................................................................................... G-9

C. Employer Liability by Tacking ............................................................................................................................................ G-9

D. Employer Liability by Election ........................................................................................................................................... G-9

E. Employer Liability Under the Federal Unemployment Tax Act .......................................................................................... G-9

F. Termination of Liability ..................................................................................................................................................... G-10

G. Offset Credit Against the Federal Unemployment Tax ..................................................................................................... G-11

H. Qualified Settlement Funds ............................................................................................................................................... G-11

V. WAGES ........................................................................................................................................................................... G-12

A. Wages Defined .................................................................................................................................................................. G-12

B. Meals and Lodging as Wages ............................................................................................................................................ G-12

C. Tips as Wages .................................................................................................................................................................... G-12

D. Remuneration Not Considered Wages .............................................................................................................................. G-12

E. Wage Limitations ............................................................................................................................................................... G-13

RATE OF CONTRIBUTION ........................................................................................................................................... G-15

A. Payment of Contributions .................................................................................................................................................. G-15

B. Penalties For Failure To File Reports ................................................................................................................................ G-16

C. Waiver of Interest and Penalties ........................................................................................................................................ G-17

D. Filing Reports Under Protest ............................................................................................................................................. G-18

E. Overpayments And Underpayments .................................................................................................................................. G-18

I. EXPERIENCE RATING ................................................................................................................................................. G-19

A. Introduction ....................................................................................................................................................................... G-19

B. Employer’s Benefit Ratio .................................................................................................................................................. G-20

C. The State Experience Factor .............................................................................................................................................. G-21

D. Fund Building Rate ........................................................................................................................................................... G-22

E. Computation of the Contribution Rate ............................................................................................................................... G-22

F. Total Transfer of Experience Rating Record ..................................................................................................................... G-22

G. Partial Transfer of Experience Rating Record ................................................................................................................... G-23

H. Revision of the Statement of Benefit Charges ................................................................................................................... G-24

I. Review of a Notice of Contribution Rate ............................................................................................................................ G-24

J. SUTA Dumping ................................................................................................................................................................. G-25

I. PROTESTS AND HEARINGS ON ASSESSMENTS AND REFUNDS ...................................................................... G-26

A. Protests .............................................................................................................................................................................. G-26

B. Hearings............................................................................................................................................................................ G-27

VIII. STATE OF ILLINOIS AND LOCAL GOVERNMENTAL ENTITIES ...................................................................... G-28

A. Definition of Local Government Entities .......................................................................................................................... G-28

B. Services Excluded from Employment ............................................................................................................................... G-28

C. Financing Benefits Paid to State Employees ..................................................................................................................... G-30

D. Tax Rates and Experience Rating ...................................................................................................................................... G-30

E. Benefit Reimbursement Option ......................................................................................................................................... G-30

F. Time Limits for Electing Reimbursement .......................................................................................................................... G-30

G. Changing From Contribution to Reimbursement .............................................................................................................. G-30

H. Changing from Reimbursement to Contributions .............................................................................................................. G-31

I. Allocation of Reimbursement Costs ................................................................................................................................... G-31

J. Reimbursement of Benefits Erroneously Paid .................................................................................................................... G-32

K. Payment of Reimbursement .............................................................................................................................................. G-32

CONTENTS

GUIDE TO THE ILLINOIS U. I. ACT Table

G-ii (5/22)

L. Group Accounts ................................................................................................................................................................. G-32

IX.

NONPROFIT ORGANIZATION ................................................................................................................................... G-33

A. Definition of Nonprofit Organization ................................................................................................................................ G-33

B. Employment Of “Four Or More Workers Within Twenty Weeks” ................................................................................... G-33

C. Exclusions From Employment .......................................................................................................................................... G-34

D. Tax Liability ...................................................................................................................................................................... G-35

E. Benefit Reimbursement Option ......................................................................................................................................... G-35

F. Time Limits For Electing Reimbursement ......................................................................................................................... G-35

G. Filing of Quarterly Wage Reports ..................................................................................................................................... G-36

H. Changing From Contributions To Reimbursement ........................................................................................................... G-36

I. Changing From Reimbursement To Contributions ............................................................................................................. G-36

J. Allocation Of Reimbursement Cost .................................................................................................................................... G-37

K. Reimbursement Of Benefits Erroneously Paid .................................................................................................................. G-37

L. Payment Of Reimbursement Due ...................................................................................................................................... G-37

M. Group Accounts ................................................................................................................................................................ G-38

X. F

ORMS AND REPORTS REQUIRED ............................................................................................................................ G-39

A. Form To Determine Liability For the Payment of Contributions ...................................................................................... G-39

B. Forms For Reporting Wages And Paying Contributions ................................................................................................... G-39

C. Employer Records ............................................................................................................................................................. G-40

D. Notice Of Claim ................................................................................................................................................................ G-41

E. Notice Of Possible Ineligibility Form ADJ030F (Return copy) ........................................................................................ G-42

F. Claims Adjudicator’s Determination As to Eligibility ....................................................................................................... G-43

G. Report of Workers Affected By A Labor Dispute ............................................................................................................. G-43

H. Notice of Determination .................................................................................................................................................... G-44

I. Back Pay Awards…………………………………………………………………………………………………………G-43

XI. CLAIMANT BENEFITS ................................................................................................................................................ G-45

A. Base Period Wages and Benefit Year ................................................................................................................................ G-45

B. Weekly Benefit Amount .................................................................................................................................................... G-45

C. Disqualifying Income ........................................................................................................................................................ G-46

D. Extended Benefits ............................................................................................................................................................. G-47

E. Claimant Non-Monetary Eligibility ................................................................................................................................... G-47

F. Voluntary Leaving Disqualification ................................................................................................................................... G-49

G. Misconduct Disqualification ............................................................................................................................................. G-50

H. Felony and Theft Disqualification ..................................................................................................................................... G-51

I. Refusal of Work Disqualification ....................................................................................................................................... G-51

J. Labor Dispute Disqualification ........................................................................................................................................... G-52

K. School Personnel Disqualification..................................................................................................................................... G-52

L. Athlete Disqualification ..................................................................................................................................................... G-53

M. Alien Disqualification ....................................................................................................................................................... G-54

N. Appeals And Hearings On Claimant Eligibility For Benefits ........................................................................................... G-55

XII

. POLICING THE UNEMPLOYMENT INSURANCE PROGRAM .............................................................................. G-56

A. Benefit Payment Control ................................................................................................................................................... G-56

B. Random Audit ................................................................................................................................................................... G-56

C. Field Audits ....................................................................................................................................................................... G-57

D. Personal Liability of Officers and Employees…………………………………………………………………………….G-56

XIII.

THE DIRECTORY OF NEW HIRES .......................................................................................................................... G-58

A. Who is Affected? ............................................................................................................................................................... G-58

B. What is this Program?........................................................................................................................................................ G-58

C. Why was it Enacted? ......................................................................................................................................................... G-58

D. How does it Operate? ........................................................................................................................................................ G-58

E. Where do I go for Information? ......................................................................................................................................... G-58

GUIDE TO THE ILLINOIS U. I. ACT Part I

G-1 (5/19)

GUIDE TO THE

ILLINOIS UNEMPLOYMENT

INSURANCE ACT

NTRODUCTION

he Illinois Unemployment Insurance Act was enacted to provide partial protection to workers against the loss of wages when they

are out of work due to a lack of opportunities. For this reason, contributions and payments in lieu of contributions are required from

certain employers to maintain the fund used to pay benefits to the unemployed workers who meet the eligibility requirements of the

law.

Unemployment benefits are not “hand-outs” or “relief” and are not available just for the asking. They are insurance, bought and

paid for by their employers, and paid only to job seekers who are unemployed through no fault of their own and who are ready,

willing and able to accept suitable employment.

nemployment insurance is a joint State-Federal endeavor. The programs involving the payment of benefits, the collection of

contributions and payments in lieu of contributions and employment service are the responsibility of the State. The federal govern-

ment pays the cost of administration.

he overall tax liability of an employer in relation to unemployment insurance is determined by both federal and State law. An

employer that is subject to one is usually subject to both. The major exceptions are certain types of nonprofit organizations, local

governmental entities and the State of Illinois that are subject to only Illinois law.

mployers subject to both the Federal Unemployment Tax Act and the Illinois Unemployment Insurance Act do not have to make

the full payments required by the federal Act IF they make the proper payments to the State FIRST.

This Guide has been prepared in order to inform employers of their rights and responsibilities under the Illinois Unemployment

Insurance Act. It describes the conditions under which an employer is liable for the payment of contributions or for making

payments in lieu of contributions, the reports that must be filed by all employers, the varying rates at which contributions are paid,

the circumstances under which unemployed workers are eligible for benefits and, in general, the highlights of Illinois

unemployment insurance law.

eading the entire Guide will give an employer a broad picture of the unemployment insurance program as administered by the

Department of Employment Security.

he Guide should be kept and used as a reference for the explanation of particular issues that may arise from time to time.

Employers having questions not answered by this Guide should contact:

llinois Department of Employment Security

Employer Hot Line

33 South State Street

Chicago, Illinois 60603

(800) 247-4984

* I

MPORTANT *

THIS GUIDE DOES NOT HAVE THE EFFECT OF LAW, RULINGS OR REGULATIONS. IT IS PROVIDED FOR

INFORMATIONAL PURPOSES ONLY, AND IT IS NOT INTENDED TO PROVIDE, OFFER OR BE A SUBSTITUTE

FOR COMPETENT LEGAL ADVICE.

GUIDE TO THE ILLINOIS U. I. ACT Part II

G-2 (5/19)

II. EMPLOYER’S RESPONSIBILITIES TO WORKERS

A. Inf

ormation Required to Be Given to Workers

l employers subject to the Illinois Unemployment Insurance Act are required to inform workers about their rights to

unemployment insurance benefits. There are two requirements.

rst, the employer is required to post notices and signs sent to it for that purpose by the Department of Employment Security. By

law and regulation, the employer must post these notices in conspicuous places in its establishment where they may be seen by

employees. (56 Ill. Adm. Code 2760.1)

Second, when a worker quits, is discharged, or is laid off for an expected duration of seven days or more, the employer is required

to give the worker a copy of “What Every Worker Should Know About Unemployment Insurance”. (56 Ill. Adm. Code 2720.100)

English and Spanish versions of this publication are also available on the Department’s website.

Thi

s pamphlet gives the worker information about the conditions he must meet to be eligible for unemployment insurance benefits.

If delivery in person is impossible or impractical, a copy should be mailed within five calendar days following the separation to the

worker’s last known address. (56 Ill. Adm. Code 2720.100)

The

employer should enter the company’s name and address in the box provided on the first page of this form.

B. Notice to Partially Unemployed Workers

A wor

ker is “partially unemployed” if he works regularly for an employer and in a calendar week works less than full-time due to a

lack of work and earns less than his weekly benefit amount. (Section 239 and 56 Ill. Adm. Code 2720.1)

If otherwise eligible for unemployment insurance benefits, this worker is entitled to benefits equal to his weekly benefit amount less

that part of his wages which are in excess of 50 percent of his weekly benefit amount. (Section 402 and 56 Ill. Adm. Code 2920.15)

In or

der for the Department to determine the amount of unemployment insurance benefits payable to such an individual, the

Department must know what his earnings were in such a week.

requested by the worker, an employer is required to furnish any worker who is partially unemployed with what is known as “valid

evidence” of such partial unemployment. This information is furnished by issuing a Low Earnings Report to an employee whenever

he earns less than the maximum weekly benefit amount allowed by law in a week of less than full-time work.

If the employer has learned from any notice received from the Department what the worker’s actual weekly benefit amount is, it

shall issue the Low Earnings Report when the worker’s earnings in a calendar week of less than full-time work are less than this

actual benefit amount.

The

employer may either fill out the Department form or may attach a blank copy of this form to a check stub, pay envelope or

voucher containing the following information:

1. Th

e name of the worker;

2. So

cial Security number of the worker;

3. Ending date of the calendar week;

4. Actu

al amount earned during the calendar week;

GUIDE TO THE ILLINOIS U. I. ACT Part II

G-3 (5/19)

5. A statement that the earnings were for a week of less than full-time work during which the earnings were reduced due to a lack

of work;

6. Nam

e and address of the employer;

7. The date the “valid evidence” is issued to the worker; and

8. A s

ignature (actual or facsimile) or other positive identification of the employer supplying the information (e.g., imprinting of

the employer’s name and address on the stub or pay envelope).

he Low Earnings Report or its equivalent must be issued not later than the pay day for the last day of the calendar week. (56 Ill.

Adm. Code 2720.107)

here are times when the Department may find it necessary to request from an employer a Low Earnings Report for a worker to

determine whether he is entitled to benefits. When an employer receives such a form, it must fill in the information requested and

return the form to the address given on the form within 5 business days of receiving it, or the Department will accept the worker’s

statement of his earnings. (56 Ill. Adm. Code 2720.107)

f a worker’s failure to work on a holiday occurs in a week in which the worker is partially unemployed, a Low Earnings Report

should NOT be given to the worker with respect to such week. If a Request For Low Earnings Report is received by the employer

under such circumstances, such report should include a statement that the worker did not work on a specific date because of a

holiday.

GUIDE TO THE ILLINOIS U. I. ACT Part III

G-4 (5/19)

III. EMPLOYER LIABILITY UNDER THE UNEMPLOYMENT INSURANCE ACT

mployers of “One or More in Twenty Weeks” or with $1,500 Quarterly Payroll

employing unit, except certain types of nonprofit organizations or local governmental entities, that has one or more persons in

employment in Illinois on any one day within each of 20 or more calendar weeks in any calendar year is required to pay

contributions for that calendar year and for at least the following calendar year, even though it did not or does not have one or more

employees in as many as 20 weeks in that second year. (Section 205)

n employing unit that does not meet the “one or more” test but pays or paid wages for services in employment of $1,500 or more

during any calendar quarter of a calendar year is required to pay contributions for that calendar year and for at least the following

calendar year.

hen any employing unit reaches the twentieth week of one or more employees, or pays wages of at least $1,500 in any calendar

quarter, it becomes liable for contributions on its taxable payroll for the entire year.

EXAMPLE: Even if the twentieth week in which one or more persons were employed falls in the last part of December, 2017 or

$1,500 in wages are paid for the first time in the fourth quarter of 2017, the employing unit is liable for contributions on its

taxable payroll for the year of 2017 and also for 2018. It must file its first report in January, 2018 and pay contributions

based on its taxable payroll for 2017, and it must file a report for each quarter in which it had paid employees.

It must also pay contributions quarterly thereafter. Once having had one or more persons in employment on any one day

within each of 20 or more calendar weeks in any calendar year, or once having paid $1,500 or more in wages in any

calendar quarter for services in employment, an employing unit will have to pay CONTRIBUTIONS FOR THAT YEAR

AND FOR EVERY YEAR THEREAFTER unless it has a year with less than “twenty weeks of one employee” AND all

the quarterly taxable payrolls in that year are less than $1,500; AND it asks the Director of Employment Security IN

WRITING to be relieved from the requirement of paying contributions; AND such request is granted.

here is a TIME LIMIT for filing such a request. For the termination of coverage to be effective as of January of any calendar year,

the request must be filed prior to February 1 of such year.

However, an employer that no longer has services being performed for it and ceases to pay wages for services in employment in

Illinois can request termination immediately if it files an application with the Director within five days after the date that its next

wage report is due.

wever, if the employer again has individuals providing services to it during that calendar year or the following calendar year, the

termination shall be rescinded as of the date that the termination was originally granted. Additionally, if the Director determines that

the employing unit has permanently ceased to pay wages for services in employment and permanently ceased to have any individual

performing services for it, he may terminate that employing unit on his own initiative. (Section 301)

or an employing unit to have in employment one or more individuals within each of 20 or more calendar weeks does not mean that

an employing unit must necessarily have a staff of one or more regular, full-time workers for 20 weeks in a row, or that the same

individual is employed in each such week. A part-time worker, who works for only a half hour one day a week, counts just as much

in each week as one regular, full-time worker.

rather extreme example, involving an employing unit having one part-time worker, will serve to illustrate this point. If the

employing unit hired a different part-time worker each week for 20 calendar weeks, it would have to pay contributions for that year

and for at least the next calendar year.

he week to be used in determining liability is a CALENDAR WEEK, which may not necessarily be the employer’s payroll week.

An employer’s payroll week could end on any day of the week. However, a CALENDAR WEEK begins at 12:01 A.M. on Sunday

and ends at midnight on the following Saturday. If a worker works a few hours on Saturday and a few hours on Sunday in the same

weekend, he is working in two different calendar weeks.

GUIDE TO THE ILLINOIS U. I. ACT Part III

G-5 (5/19)

All individuals performing services for an employing unit are counted in determining the number of workers or in determining the quarterly

taxable wages EXCEPT the following:

1. Sole proprietor or partner. (Section 206) A SOLE PROPRIETOR OR PARTNER IS NOT AN EMPLOYEE AND SHOULD NOT BE

REPORTED AS SUCH. An individual who operates as a sole proprietor is NOT in an employment relationship because the individual

is performing services for himself, not a separate employing unit. Under the Act, an employment relationship requires that the

individual and the employing unit be distinct, legal entities. This reasoning also applies to partnerships. If an individual incorporates

a business and operates that business under the auspices of the corporation, including a subchapter “s” corporation, then the

corporation is the employing unit with respect to services the individual performs for it, whether the individual is a sole shareholder,

corporate officer or sole employee. Unless an exemption applies, the individual’s services for the corporation constitute employment,

and the corporation may be the individual’s employer. Wages paid to a corporate officer for Act-insured employment may be used to

establish monetary eligibility to receive benefits, however, just because the corporate officer is monetarily eligible to receive benefits

does not necessarily mean that the individual will be otherwise eligible for benefits. An individual working for a corporation, even if

earning no wages, may not be an unemployed individual under the Act’s definition of an “unemployed” individual. (Section 239)

That issue is determined on a case-by-case basis. When an individual provides services to a corporation, it is expected that he would

be paid. If the individual receives remuneration in the form of dividends, the Department will attribute a reasonable portion of such

dividends as wages subject to the payment of contributions.

EXAMPLE: Johnson is a sole proprietor, operating as Johnson’s General Store. As such, he should not report his remuneration as wages

subject to the payment of contributions. He later incorporates as Johnson’s General Store, Inc., a subchapter “s”

corporation. For federal income tax purposes, his wages are treated as if he were still a sole proprietor. However, for

purposes of the Unemployment Insurance Act, he is an employee, and his wages are subject to the payment of

contributions. If, instead of receiving wages for his services, Johnson is paid dividends by the corporation, a reasonable

amount of such dividends will be treated as wages subject to the payment of contributions.

EXAMPLE: Jones is the sole shareholder of a corporation in the construction industry. During the winter, the company is shut down, and

its employees are laid off. Jones continues to work full time seeking contracts for the corporation when it reopens in

Spring. If Jones applies for unemployment insurance benefits, it will be determined that she is not actively seeking or

available for work because she is seeking contracts for the corporation rather than applying for jobs. To the extent that

Jones spends more than a minimal amount of time seeking contracts for the corporation, it could also be found that she is not

“unemployed” since she is still providing services to the corporation, even if she is not being paid.

2. Directors of a corporation acting in the capacity of a Director or on a committee provided for by law or by the charter or the

ylaws of the corporation. The services on the committee must be as a Director dealing with broad matters of policy, and not

those ordinarily performed by an officer or other employee of a corporation. (Section 232) This Section does not apply to certai

non

profit organizations.

3. The owner’s father, mother, spouse, and the owner’s child under the age of 18. If the entity is a partnership, the father, mother,

spouse or child under the age of 18 must be the father, mother, spouse or child under the age of 18 of every partner (56 Ill. Ad.

Code 2732.235) A person working for a corporation is counted even though the owner of all the stock is the worker’s son,

daughter, spouse or parent. (Section 218)

4. P

ersons who do not perform any of their services in the State of Illinois. However, after 1971, if such person is not covered by

any other state or Canada, his services are considered to be Illinois employment if the place from which the services are directed

or controlled is in Illinois.

so, services of a citizen of the United States performed outside the United States for an American employer are considered

Illinois employment if the principal place of business of the employer is located in Illinois or, if there is no place of business in

the United States, the owner or partners reside in Illinois, or the corporation is organized under the laws of Illinois if the

mployer is a corporation. (Sections 207, 208, 208.1 and 208.2)

5. P

ersons free from the employer’s control and direction who are engaged in an independent trade, occupation, business or

profession and who perform services that are outside the course of the employer’s business or performed outside the place of

business. (Section 212)

his provision is much narrower than what is commonly known as an “independent contractor”. See 56 Ill. Adm. Code

2732.200 for some of the factors considered in the application of this exception.

6. Agricultural and aquacultural workers. Only certain specified types of these workers are counted in employment. The worker

should be counted if the employing unit paid cash wages of $20,000 or more in any calendar quarter either in the current or

preceding year to workers employed in agricultural or aquacultural labor OR the employing unit employed 10 or more such

workers in each of 20 or more weeks in either the current or preceding year. (Sections 214 and 211.4)

7. Domestic workers in private homes, local college clubs and local chapters of college fraternities or sororities unless their

GUIDE TO THE ILLINOIS U. I. ACT Part III

G-6 (5/19)

employer had paid cash wages of $1,000 or more in any calendar quarter in either the current or preceding calendar year to an

individual or individuals employed in such domestic service. (Sections 215 and 211.5)

8. Of

ficers or members of the crew of a vessel that is not an American vessel or that is directed or maintained from an operating

office outside this State. This includes persons whose services are performed outside this State. This includes persons whose

services are performed on or in connection with an aircraft, which is not an American aircraft, if the person is employed on or in

connection with such aircraft when outside the United States. (Section 216)

9. R

eal estate salesmen under certain conditions. (Section 217)

10. P

ersons under the age of 18 who deliver newspapers or shopping news and any persons who deliver newspapers or shopping

news to the ultimate consumer, if substantially all of their remuneration is on a “per piece” or output rather than an hourly basis,

and they work under written contracts that indicate they are not to be treated as employees for federal tax purposes.

reelance editorial and photographic work for newspapers is also exempt. (Section 225)

11. Insurance agents who are paid solely by commission. (Section 228)

12. Pe

rsons who perform services in another state as well as in Illinois if the Director of Employment Security has agreed to

consider all of their services performed in another state. (Section 2700)

13. C

ertain persons performing services for nonprofit organizations. (See the section on nonprofit organizations for a complete

explanation.)

14. C

ertain persons who perform services for governmental entities. (See the section on governmental entities for a complete

explanation.

)

15. Direct sellers of consumer goods outside of a retail establishment if the remuneration for such service is directly related to

sales, rather than hours worked, and the services are performed pursuant to a written contract that provides that the person shall

not be treated as an employee for federal tax purposes. (Section 217)

16. Own

er-operators of their own trucks but only under certain specified circumstances as provided in the Act. (Section 212.1 a

56 Ill. Adm. Code 2732.205)

17. R

eal estate closing agents when their contract with the title insurance company specifies that they are not employees and they

are paid on a per-closing basis. (Section 217.1)

18. Real estate appraisers whose written employment contract provides that they are paid on a fee-per-appraisal basis and that they

e free to accept or reject appraisal requests from that entity or from other entities. (Section 217.2)

19 Go

lf caddies if they are full-time students under the age of 22 and are paid directly by a golf club member or by the golf club on

behalf of a member. (Section 232.1)

20. Full-time students in the employ of an organized camp under certain specified conditions. (Section 232.2)

21. An

election official or election worker for certain governmental entities if the remuneration received by the individual for such

services in any year is less than $1,000. (Section 220)

22. An alien admitted to the United States to perform service in agricultural labor pursuant to Sections 214(c) and 101(a)(15)(H) of

the Immigration and Nationality Act (Section 211.4)

urthermore, any individual’s services will be considered “employment” for Illinois Unemployment Insurance purposes if such

services constitute “employment” under the provisions of the Federal Unemployment Tax Act (FUTA). Such services will also be

considered “employment” if FUTA deems such service to be “employment” to enable Illinois employers to receive the full FUTA

tax credit for the contributions paid. (Section 245B)

In most situations, the services of actors, actresses, singers, musicians, models and other “talent” constitute employment under the

Act. However, a talent or modeling agency that is licensed under the Private Employment Agency Act is not the employing unit

with respect to the performance of services for which an individual has been referred by the agency. (Section 204)

nder certain conditions, an employee leasing company that contracts with a client to supply or assume responsibility for workers

that perform services for the client on an on-going, rather than temporary basis, may be considered to be the employer. The

GUIDE TO THE ILLINOIS U. I. ACT Part III

G-7 (5/19)

employees must be paid directly from the employee leasing company’s account, the employee leasing company must retain the right

to hire or terminate the worker, either exclusively or in conjunction with the client, and the client’s unemployment insurance

contribution rate must be equal to or lower than the new employer rate. If the client’s rate is higher, the difference between the

client’s rate and the employee leasing company’s rate must not exceed 1.5 percent. (Section 206.1) See part X, Section A, for

reporting requirements.

n deciding whether wages for agricultural workers should be reported for unemployment purposes, a crew leader can be considered

an employing unit. (Section 211B)

A further note on sole proprietors and corporate officers. An individual who operates as a sole proprietor is not in an employment

relationship because there is no other party. The sole proprietor running the business is the same entity as the individual performing

the services. Under the Act, employment requires that the individual and the employing unit be distinct entities.

GUIDE TO THE ILLINOIS U. I. ACT Part IV

G-8 (5/19)

Any individual who is a member of a crew furnished by a crew leader to perform agricultural services for any other employing unit

shall be treated as employed by the crew leader if the leader holds a valid certificate of registration under the Farm Labor Contractor

Registration Act of 1963 or substantially all of the members of such a crew operate or maintain tractors, mechanized harvesting or

crop dusting equipment or any other mechanized equipment provided by the crew leader.

Furthermore, any individual furnished by a crew leader for service in agricultural labor for an employing unit who does not fall

within the employ of a crew leader will be treated as performing services in the employ of the other employing unit. Such

employing unit will be treated as paying cash wages equal to the amount paid by the crew leader. (Section 211.4)

Under Section 214 of the Act, “agricultural labor” means all services performed as follows:

a. On a farm, in the employ of any person, in connection with cultivating the soil or in connection with raising or harvesting any

agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training and management of

livestock, bees, poultry, and fur-bearing animals and wildlife;

b. In the employ of the owner or tenant or other operator of a farm, in connection with the operation, management, conservation,

improvement, or maintenance of such farm and its tools and equipment;

c. In connection with the ginning of cotton, or the operation or maintenance of ditches, canals, reservoirs, or waterways not owned

or operated for profit, used exclusively for supplying and storing water for farming purposes;

d. In the employ of the operator of a farm, or a group of operators of farms (or a cooperative organization of which such operators

are members), in handling, planting, drying, packing, packaging, processing, freezing, grading, storing or delivering to storage

or to market or to a carrier for transportation to market, in its unmanufactured state, any agricultural or horticultural commodity;

but only if such operator or operators produced more than one-half of the commodity with respect to which such service is

performed.

The definition of “agricultural labor” shall not include services performed in connection with commercial canning or commercial

freezing or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for distribution for

consumption. (Section 214)

The term “farm” as used in this Section includes stock, dairy, poultry, fruit, furbearing animals, and truck farms, plantations,

ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural

commodities and orchards. (Section 214)

The term “aquacultural labor” means all services per-formed in connection with the production of aquatic products as defined in the

Aquacultural Development Act

If you are in doubt as to whether you are required to count an individual in a specific situation, consult your local unemployment

insurance office or write to:

Department of Employment Security

Employer Hot Line

33 South State Street

Chicago, Illinois 60603

If you have a more complex legal question, such as one about “employee leasing” (additional information on this subject can be

found on the IDES website), contact the Office of Legal Counsel, 9th Floor, Department of Employment Security, in Chicago.

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B. Employer Liability by Succession

An entity which purchases or otherwise acquires an organization, trade or business owned or operated by another, which is at the

time of the transfer required to pay contributions must, in turn, pay contributions for the remainder of the year in which the transfer

takes place, and indefinitely after that, until there is a year of less than “twenty weeks of one employee” AND all the quarters’

taxable payrolls in that year are less than $1,500; AND the entity requests in writing that its liability be ended; AND such request is

granted. (Section 205C)

EXAMPLE: Kramer, a grocer, has one person working for him on one day in each of 25 weeks in 2017. He sells his store as a

going business to Green on February 1, 2018. Kramer must pay contributions based on his payroll for the month of January,

2018. Green must pay contributions for the month of February and for the remainder of 2018 (and for January also, if he

paid workers in January) and for each year thereafter until his liability ceases.

Any person or firm purchasing or otherwise acquiring the business or a portion of a business of another or the business assets of

another should request the seller to produce a certificate from the Director of Employment Security stating that it owes no

contributions, interest, or penalties; otherwise, the purchaser or transferee will become PERSONALLY LIABLE for the payment of

contributions, interest or penalties owed by the seller, or the transferor (up to the value of the property acquired), unless it withholds

enough of the purchase price to pay to the Director the amount owed by the seller. (Section 2600)

Caution: Compliance with the Illinois Bulk Sales Act is insufficient.

Similarly, an employing unit that buys the assets or a portion of the assets of another business that is outside the purchaser’s usual

course of business and either assumes a substantial amount of the seller’s debts or obtains a substantial amount of its goodwill, or

continues in the same business at the same place of business must pay contributions if the seller was required to do so. (Section 205)

Any employing unit that succeeds to substantially all of the assets of an organization, trade or business, or of a severable portion of

those assets, is required to file a signed form UI-1 S&P “Report To Determine Succession” or a document that includes the same

information. This report should be filed online using MyTax Illinois (mytax.illinois.gov) or by mail to: Central Registration

Division, Illinois Department of Revenue, PO BOX 19030 MAIL CODE 3-222, Springfield, IL 62794-9030. (56 Ill. Adm. Code

2760.105)

C. Employer Liability by Tacking

Whenever one acquires the business assets or business of another during a calendar year and continues in that business, the number

of weeks in which the purchaser has one or more employees during the rest of the year will be added to the number of such weeks

which the seller had during the first part of the year and if the total makes 20 or more weeks, the purchaser will be required to pay

contributions on its own payroll for that year and for at least the following year.

Similarly, if the acquisition occurs during a calendar quarter, the buyer’s taxable payroll for the remainder of the calendar quarter is

added to the seller’s payroll for that quarter. If the total is $1,500, or more, the buyer will be required to pay contributions on its

own payroll for that year and for at least the following year.

D. Employer Liability by Election

Employing units, except State and local governmental entities, that do not have to pay contributions for any of the foregoing reasons

or because the worker’s services do not constitute employment (Section 206) may desire to have its workers insured against the risk

of unemployment.

They may request permission to pay contributions. If the Director approves the request, the employer must pay contributions for at

least two full calendar years and comply with the requirements to which all other employers are subject. (Section 302)

E. Employer Liability Under the Federal Unemployment Tax Act

Any employing unit, except for certain types of nonprofit organizations and local governmental entities, that must pay a tax under

the Federal Unemployment Tax Act because the employing unit has employed one or more persons on some day within each of 20

or more weeks in a calendar year throughout the United States (and in some instances, outside the United States), must pay

contributions based on wages paid to those working for the employing unit in Illinois.

EXAMPLE: An employer having one or more persons in employment on some day within each of 20 or more calendar weeks in

2018 in the United States with two workers in Illinois for less than 20 weeks (with a quarterly payroll in Illinois of less than $1,500)

and two in Iowa for 20 weeks or more, must pay contributions to Illinois based on the wages that it pays its Illinois workers. The

employer receives credit against the Federal tax for the contributions so paid.

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EXAMPLE: An employer with a sales organization in the State of New York which employs 10 persons in the New York office at

all times and employs a salesman in Chicago for less than 20 weeks and whose wages for a calendar quarter are less than

$1,500 must pay contributions under the Illinois Unemployment Insurance Act on the Illinois salesman’s wages or

commissions. The employer will receive a credit against the Federal tax for the contributions so paid.

An employer that must pay contributions to Illinois for any year, solely because of its tax liability for that year under the Federal

Unemployment Tax Act, must continue to pay contributions to Illinois, based on wages it pays its Illinois workers, for each

subsequent year (even though, for any such subsequent year, it does not incur any tax liability under the Federal Act), until the

employer requests in writing that its State liability be ended and its request is granted.

For complete information about the Federal tax, consult the Internal Revenue Service.

F. Termination of Liability

Once an employing unit is determined liable and receives an account number, whether because of its own employment experience,

by voluntary election, through succession, or because of liability under the Federal Unemployment Tax Act, it remains liable from

year to year thereafter until officially terminated by the Director.

To end liability, an employing unit must file an application for termination of coverage with the Director of Employment Security.

This application must be filed by January 31 of the year for which the employer seeks to terminate liability, and the employer must

show that its employment experience in the preceding year was such as to make it eligible to terminate liability.

In other words, most employers must show that in the preceding calendar year they did not have one or more persons in

employment within 20 or more calendar weeks, and that there was no calendar quarter in that year in which the taxable payroll

equaled or exceeded $1,500. (Section 301 and 56 Ill. Adm. Code 2760.110)

EXAMPLE: If an employer had “one employee in each of 20 weeks” in 2017 or a taxable payroll in a calendar quarter in 2017 of

$1,500 or more, but does not have such experience in 2018, it is nevertheless liable for contributions for 2018 and continues

to be liable for 2019, unless it files an application for termination of coverage on or before January 31, 2019 and the

application is approved by the Director. If it is so approved, the employer’s liability ceases as of January 1, 2019.

An employer that no longer has services being performed for it and ceases to pay wages for services in employment in Illinois can

request termination immediately if it files an application with the Director within five days of the date that wage reports are due for

the quarter. Such termination would become effective as of the last day of that quarter.

However, if the employer again has individuals providing services to it during that calendar year or the following calendar year, the

termination shall be rescinded as of the date that the termination was originally granted.

EXAMPLE: Ma and Pa wish to close their business and retire. As of September 15, 2017, they no longer have services being

performed for their business in Illinois. Their next wage report is due October 31, 2017. If they file a notice of termination

with the Director by November 5, 2017, their account will be immediately terminated, effective October 1, 2017, and it will

not be necessary for them to file wage reports showing no employment for the remainder of 2017 and for all of 2018.

However, if Ma and Pa later have services performed for the business in the state during either the remainder of 2017 or

during 2018, the approval of their termination will be rescinded as of the date that the termination was originally granted.

Additionally, if the Director determines that the employing unit has permanently ceased to pay wages for services in employment

and permanently ceased to have any individual performing services for it, he may terminate that employing unit on his own

initiative. (Section 301)

Certain nonprofit organizations subject to the Act because they have four or more workers may similarly terminate liability if the

number of workers drops below four or the number of weeks in which at least four are employed drops below 20. (See the section

on Non-profit Organizations)

It is again emphasized that liability extends from year to year regardless of the number of persons employed or the amount of wages

paid, unless an application for termination of coverage is filed on time or unless the Director terminates on his own initiative.

Liability is terminated on the basis of the information submitted, but it may be subject to an investigation at a later date.

If it is subsequently found that termination should not have been granted, the employer’s account is reinstated, and it is required to

file quarterly reports and to pay contributions, interest and penalties, as provided by the Act. This includes payment for those

quarters in which no reports were filed and no contributions were paid.

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G. Offset Credit Against the Federal Unemployment Tax

The requirement that the employer of “one or more in 20 weeks” pay contributions under the Illinois Unemployment Insurance Act

coincides with the provisions of the Federal Unemployment Tax Act (See Section 3306(a)).

Under that Act, any employer of one or more persons throughout the United States on any one day within each of 20 or more

calendar weeks in a calendar year must pay to the federal government a tax on its taxable payroll.

Likewise, if it pays total insured wages to persons throughout the United States (and in some instances, outside the United States),

of at least $1,500 in a calendar quarter, it is liable for federal unemployment taxes. This provision does not apply to certain types of

nonprofit organizations and to local governmental entities.

Beginning July 1, 2011, the FUTA tax rate became 6.0% on the wages paid after June 30, 2011. For 2018, the FUTA tax rate is still

6.0%.

If Illinois did not have a certified unemployment insurance law, Illinois employers would be required to pay the full tax to the

federal government. For the Illinois law to be certified by the U.S. Secretary of Labor, the Illinois law must meet certain federal

guidelines.

Because Illinois does have a certified unemployment insurance law, employers which pay contributions on time receive an offset

credit against the federal unemployment tax. An employer is also entitled to an additional credit against the federal tax equal to the

difference between the amount of contributions actually paid and the amount it would have been required to pay if it did not have a

reduced rate based on its experience.

The maximum credit that may be granted against the federal tax is limited to 90 percent of that tax at a “deemed” rate of 6 percent.

This means that the maximum credit allowed is 5.4 percent. Further information can be found at the Internal Revenue Service

website http://www.irs.gov/uac/Form940.

It should be noted that an employer which is delinquent in the payment of contributions to the State may be required to pay the

federal tax in full in addition to contributions to the State, plus interest and penalties.

EXAMPLE: Employer Z is liable both under the Federal Unemployment Tax Act and the Illinois Unemployment Insurance Act for 2017.

In 2017, it paid its workers taxable wages of $10,000. Its tax at 6.0 percent of its payroll under the Federal Unemployment Tax Act is

$600.00. It has an Illinois rate of 5.5 percent and as a result pays $550.00 in State contributions. If Employer Z pays contributions to

Illinois in full on or before January 31, 2018, it may report its federal tax payable as follows:

1. Taxable wages paid $10,000.00

2. Federal Tax at 6.0 percent 600.00

3. Credit for Contributions paid to Illinois (Cannot

exceed the maximum credit offset, which is 5.4 percent) -540.00

4. Net federal Tax Due 60.00

H. Qualified Settlement Funds

Qualified Settlement Funds (QSF) cannot be employers because no services are performed for the QSF by employees involved in

the settlement. Wage payments made by a QSF are the result of services that were actually or constructively performed for the

employer or employers involved in the settlement. Since the employer with direction and control of the worker is the employer for

purposes of the Act, wage distributions as a result of a settlement must be reported, and contributions or payments in lieu of

contributions paid, by the employer or employers involved in the settlement.

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IV. WAGES

This Section applies to all employers, including non-profit organizations and governmental entities that elect to reimburse benefits

in lieu of paying contributions.

A. Wages Defined

In general, “wages” means every form of remuneration for personal services, including salaries, commission, bonuses and the

reasonable money value of all remuneration in any medium other than cash.

The reasonable money value of remuneration in any medium other than cash shall be estimated and determined in accordance with

rules prescribed by the Director. Such rules shall be based on the reasonable past experience of the workers and the employing

units. (Section 234)

B. Meals and Lodging as Wages

Board, lodging, meals or other payment in kind received by a worker from his employer in addition to or in lieu of (rather than a

deduction from) money wages shall be considered remuneration paid by the employer.

The Director shall determine or approve the cash value of such payments. This cash value shall be used in determining the wages

paid to the worker and in computing the contributions due under the Act.

Where a money value for board or lodging or both furnished a worker is agreed upon in an employment contract, the amount agreed

upon shall be considered the cash value of such board and lodging. (56 Ill. Adm. Code 2730.100) However, meals given for the

convenience of the employer are not remuneration for services and do not constitute wages. (56 Ill. Adm. Code 2730.100)

C. Tips as Wages

Employers that have individuals in their employ who customarily receive tips in the course of their work are required by law and

regulation to post notices advising such workers of their duty to report the amount of tips they receive. (56 Ill. Adm. Code 2730.105

and Section 234)

Employers should request copies of the required posters and forms from Employer Hot Line, Department of Employment Security,

33 South State Street, Chicago, Illinois 60603, (800) 247-4984.

Detailed rules with respect to the reporting of tips as “wages” can also be obtained from the Office of Legal Counsel, 9th Floor,

Department of Employment Security, in Chicago.

D. Remuneration Not Considered Wages

There are several classes of remuneration which are NOT considered “wages”, which need NOT be reported, and on which

contributions are NOT required. (Section 235)

The exemptions from the definition of “wages” are also available to nonprofit organizations and local governmental entities that

elect to reimburse benefits in lieu of paying contributions.

The exemptions to the definition of “wages” include:

1. Payments to a worker for actual expenses incurred for the employer in the course of his employment, for which the employee is

required to submit a current and itemized account to his employer.

2. Payments made under a workers’ compensation law are excluded from the term “wages.” Premium payments made under a

workers’ compensation law are also excluded.

3. Payments under a plan or into a fund (including accident insurance premiums) on behalf of workers or their dependents for

medical or hospital expenses in connection with sickness or accident disability, or death;

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PROVIDED that these payments are made under a plan applying generally to the employer’s workers and their dependents and not

to a specific individual.

The sickness or accident disability exemption is limited to those advanced premium payments made under a plan or into a fund

for sickness or accident disability. Sick pay and disability payments actually made to the individual or his dependents on

account of sickness or accident disability are not exempt (except for payments made under a workers’ compensation law, which

are exempt).

4. Payments to an employee in connection with sickness or accident disability or related medical and hospital expenses, made by

the employer more than six months after the employee last performed service for the employer.

5. Payments made to, or on behalf of, an employee or his beneficiary that would be excluded from “wages” by subparagraphs (A),

(B), (C), (D), (E), (F) or (G) of Section 3306(b)(5) of the Federal Internal Revenue Code of 1954, in effect on January 1, 1985.

6. Remuneration to an individual employed in agricultural labor, as defined by Section 214 of the Act, which is made in a medium

other than cash.

7. Payments that are not taxable for federal income tax purposes as part of a cafeteria plan established under Section 125 of the

Internal Revenue Code of 1986 are not included in “wages”, to the extent that (1) the benefit chosen under the plan is

specifically excluded under Section 235 of the Act and (2) under Section 245(c) of the Act, the benefit is not includable in the

terms “wages” subject to the payment of taxes under FUTA. (56 Ill. Adm. Code 2730.150)

EXAMPLE: Payments made under a plan established by an employer generally for individuals in its employ to provide for the

payment of medical insurance premiums, which would not be includable in gross income for federal income tax purposes

under Section 125 of the Internal Revenue Code of 1986, are not includable as wages because there is a specific exclusion

in the Act for payments on account of medical or hospitalization expenses in connection with sickness or accident disability

and such payments are not subject to the payment of taxes under FUTA.

EXAMPLE: Payments made under a plan established by an employer generally for individuals in its employ to provide for the

payment of dependent care assistance, which would not be includable in gross income for federal income tax purposes

under Section 125 of the Internal Revenue Code of 1986, are includable as wages because there is no specific exclusion in

the Act for payments on account of dependent care assistance even though they are not subject to the payment of taxes

under FUTA.

8. Payments that are not taxable for income tax purposes under Section 401(k) of the Internal Revenue Code of 1986 are included

in “wages,” as defined in Section 234 of the Act. Amounts deducted from an individual’s taxable income pursuant to salary

reduction arrangements, as well as employer contributions, are also “wages.” (56 Ill. Adm. Code 2730.155)

E. Wage Limitations

For the calendar years 2014 through 2019, only the first $12,960 of wages paid to a worker during that calendar year are subject to

the payment of contributions. (Section 235)

Total wages in excess of these amounts for all workers in the quarter must be reported, but contributions on such excess are not

paid.

In general, only the wages paid by the employer itself or tips can be considered in applying the particular wage limitation. However,

there are situations in which an employer may take into account wages paid by another employer.

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One such situation is where both employing units are owned or controlled by the same interests. In the other instance, an employer

which succeeds to the business or substantially all of the assets of another employer or distinct severable portion thereof is treated as

a single unit with its predecessor for the purpose of the wage limitation in the year in which the succession occurs, provided that the

predecessor was also liable for the payment of contributions. (Section 235)

EXAMPLE: On April 1, 2018, Jones buys from Brown an established drug store already liable for the payment of contributions.

Brown had already paid a pharmacist wages of $5,000 in the period January 1 through March 31 and had paid contributions

on those wages. Jones hires the same pharmacist and pays him wages of $34,500 in the period from April 1 to December

31. Jones is required to pay contributions on only $7,960 of the $34,500 which he paid the pharmacist.

In computing the wage limitation for any calendar year, an Illinois employer may count the wages paid by it to a worker on which it

has to pay contributions to another state or states.

EXAMPLE: Taylor, a building contractor, hires a carpenter to work on a project in Wisconsin in the Spring of 2018 and pays him

$8,000 for such work. Since all the work is performed in Wisconsin, he pays contributions on the $8,000 to the State of

Wisconsin. In the Fall of 2018, Taylor hires the same carpenter to work on a project in Chicago. He pays him wages of

$8,000. Taylor is required to pay contributions to Illinois on only $4,960 of the $8,000 paid for work in Illinois.

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V. RATE OF CONTRIBUTION

The entry level contribution rate for employers, except nonprofit organizations and governmental entities that elect to reimburse

benefits in lieu of paying contributions is the GREATEST of the following four rates:

1. 2.7 percent;

2. 2.7 percent times the adjusted state experience factor;

3. The rate determined by the employer’s Economic Sector in the North American Industry Classification System (NAICS), which

is based on the average contribution rate for all experience rated employers in that specific Economic Sector (or a similar system

sanctioned by the U.S. Secretary of Labor and established by rule); or

4. A rate determined in accordance with the experience rating provisions of Sections 1501 through 1507 of the Act, but only if the

employer has had at least 13 consecutive months experience with the “risk of unemployment.”

As used in Section 1500 of the Act, the “risk of unemployment” means the possibility that the wages paid by an employer could

become base period wages for an individual.

EXAMPLE: A sole proprietor begins business on February 1, 2017. On April 1, 2017, the proprietor hires his first employee who

begins work on that date. Assuming the proprietorship becomes liable for the payment of contributions for calendar year

2017, April, 2017 is the first month in which the proprietorship faces the risk of unemployment since it is the first month

that the proprietor paid wages that could become base period wages.

The greatest of these entry level rates is applicable to those employers that have not qualified for a variable contribution rate

determined on the basis of their previous experience with the risk of unemployment because they have less than three years of

liability under the Act.

A. Payment of Contributions

Except for certain employers of only household workers (See 56 Ill. Adm. Code 2760.128 and Section 1400.2), contributions are

payable and wage reports must be filed quarterly - on or before April 30, July 31, October 31, and January 31, respectively - for the

preceding quarter, but may be accelerated by the Director. An employing unit that becomes newly liable under the law must file its

first wage report and pay its first contributions on or before the end of the month following that quarter in which it became liable.

Liability is always for the ENTIRE calendar year once the employing unit becomes liable, and contributions are due on the entire

taxable payroll since the preceding January 1.

The amount of wages upon which the employer is liable for payment of contributions may vary from year to year according to the

different amount set by law. The principle of liability expressed in the two following examples remains valid despite statutory

changes to the wage base.

EXAMPLE: An employer which has previously not been liable for the payment of contributions and has one or more workers in

employment within each of five calendar weeks in the first quarter of 2018 (January, February and March), within each of

five calendar weeks in the second quarter (April, May and June) and within each of ten calendar weeks in the third quarter

(July, August and September) must file its first report and pay contributions by October 31, 2018.

The employer must report by quarter all wages paid by it in 2018 from January 1 to September 30, and pay contributions on

all such wages up to the taxable wage limit of $12,960 applicable to 2018 for each worker, whether part-time or full-time,

steady or extra.

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The employer makes its next report and payment in January 2019 covering wages paid in October, November and

December 2018, but pays contributions only on wages paid to each worker not in excess of the first $12,960 paid to such

worker in 2018. If this employer had 25 or workers in its employ in 2018, it must file monthly wage reports beginning in

July, 2019.

EXAMPLE: An employer, not previously liable for the payment of contributions, which pays $1,500 or more in wages to

its worker or workers within the second quarter of 2018 (April, May and June) must file its first report and pay

contributions by July 31, 2018. It must report by quarter all wages paid by it in 2018 from January 1 to June 30, and pay

contributions on all such wages up to $12,960 for each worker. The employer makes its next report and payment by Oc-

tober 31, 2018, covering wages paid in July, August and September 2018, but pays contributions only on wages paid to

each worker not in excess of the first $12,960 paid each worker in 2018.

The employer makes its fourth quarter report and payment by January 31, 2019, paying contributions only on wages paid to

each worker not in excess of the first $12,960 paid to such worker in 2018. If this employer had 25 or more workers in its

employ in 2018, it must file monthly wage reports beginning in July, 2019.

Whether an employer had 25 or more workers in its employ is determined by counting the total number of social security numbers

reported by the employer during the prior year.

The fact that the Director has not sent a newly liable employer a contribution report or notice that it is liable is NOT an excuse for

late payment. THE DUTY OF REGISTERING AND COMPLYING WITH THE LAW RESTS UPON THE EMPLOYER.

If a newly liable employer does not have enough time to get the proper forms and still file them on time, it should compute the

amount of contributions it owes the Director and mail its check or money order, with an explanatory letter and a list of its

employees’ names, social security numbers and the amount of wages paid to each employee during each quarter involved.

B. Penalties For Failure To File Reports

An employer that fails to file a timely quarterly wage and contribution report must pay a penalty for each month or part of a month

that the report was late. The Department accepts a post mark by the U.S. Postal Service as the date of filing a report or

making a payment. If a private delivery service is used, however, the date of filing or payment is the date that the report is

actually delivered to the Department unless the private delivery service is one recognized by the Internal Revenue Service

pursuant to 26 USC 7502(f). The names of recognized delivery services can be found in IRS Notice 2004-83 or its later

revision. (56 Ill. Adm. Code 2725.11)

The penalty for failing to file a timely quarterly wage and contribution report or monthly wage report is $5 for each $10,000 or

fraction thereof of the total wages for insured work paid by it during the period or $2,500 per month, whichever is less. The

maximum penalty is $10 for each $10,000 or fraction thereof of the total wages for insured work paid during the period or $5,000,

whichever is less.

Pursuant to rule, all employers with 25 or more employees (not necessarily all 25 at the same time) during the preceding calendar

year must file their quarterly wage and contribution reports electronically. An electronic filer that files on paper is still subject to

the imposition of the penalty.

While there is a phase in period, by July 1, 2014, all employers with 25 or more employees in the preceding calendar year are

required to file monthly wage reports, though some waivers may be applicable.

THE PENALTY FOR LATE FILING CAN IN NO INSTANCE BE LESS THAN $50.

The penalty for failure to timely file these forms accrues even though the contributions or payments in lieu of contributions due

were paid on time. An employer that has paid wages in a calendar quarter (or month, if applicable), all of which wages are in excess

of the particular taxable wage base applicable to each worker in the particular calendar year, must also file its quarterly (or monthly)

report on time, even though no contributions are due. Failure to do so will also result in the imposition of a penalty. (Section 1402).

An employer that has paid no wages during a calendar quarter (or month, if applicable) must file a “zero” wage report or face the

imposition of a penalty.

Employers that willfully fail to pay contributions or to make payments in lieu of contributions when due, with intent to defraud,

may be subject to a penalty equal to 60 percent of the amounts due. In no instance can this penalty be less than $400. (Section 1402)

If, for any reason, an employer is not able to make a timely payment, it should complete the wage and contribution report and return

it by the due date. In this way, the employer avoids having to pay a penalty. The employer must, however, pay interest on the

unpaid contributions or reimbursement.

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C. Waiver of Interest and Penalties

The Director of Employment Security is authorized to waive the payment of all or part of any interest and penalty upon proper

application and showing of good cause. (Sections 1401 and 1402)

Good cause has been defined by Department rule to consist of any or all of the following:

1. Where the delay was caused by the death or serious illness of the employer or a member of his immediate family, or by the

death, or serious illness of the person in the employer’s organization responsible for the preparation and filing of the report or

for making the payment.

2. Where the delay was caused by the destruction of the employer’s business records by fire or other casualty without fault.

3. Where the Department, in its written communication or through a specifically identified employee in oral communication

directed to a specific employer account, affirmatively misled the employer as to its duties and obligations such that the charging

of interest to the employer would violate the principle of equitable estoppel.

4. For the purposes of waiver of interest only: Where the employer relied to its detriment on a certificate issued by the Director

pursuant to Section 2600 of the Act and the Director agrees, at a later date, that the certificate was issued in error, such waiver

shall be granted from the date the erroneous certificate was issued to a date 30 days after notice that the original certificate was

in error.

Interest can also be waived according to Department rule whenever the employer can demonstrate extreme financial hardship and

files with the Director a repayment agreement. However, the waiver in this instance only applies to additional interest that would

have accrued during the period of the repayment agreement. (56 Ill. Adm. Code Section 2765.65)

The Director will waive interest for a nonprofit organization or for a local governmental entity, if:

a. The organization or entity had never filed any of the reports or forms required of it under the Act; and

b. It had not been determined to be the “chargeable employer” as result of the filing of an unemployment insurance claim; and

c. Its chief operating officer files an affidavit with the Director in which he states that, upon learning of the organization or entity’s

liability under the Act, he took immediate action to bring the organization or entity into compliance. (56 Ill. Adm. Code

2765.70)

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The Director can grant a waiver of interest to certain nonprofit hospitals that have sustained large operating losses and that enter

into deferred payment agreements with the Director. (56 Ill. Adm. Code 2765.73)

The Director will also waive any interest accruing due to a delay that is the fault of the Department of more than 180 days in the

issuance of a decision on a protested Determination and Assessment. (56 Ill. Adm. Code 2765.71)

The Director shall also waive the penalty if:

a. The contributions due for the delinquent quarter are less than $500, except for an employer which has elected to make payments

in lieu of contributions and, therefore, pays no contributions;

b. The employer files its request for waiver within 30 working days of the mailing of a notice that its report is delinquent; and

c. The employer has not been delinquent in the filing of reports for the 20 prior consecutive calendar quarters or, in the case of a

monthly filer, 20 prior consecutive reporting periods (months and/or quarters). (Section 1402 and 56 Ill. Adm. Code 2765.68)

In order to allow for the annual filing of wage reports and the annual payment of contributions by certain employers of only

household workers (See 56 Ill. Adm. Code 2765.61 and Section 1400.2), the statute has extended the time to file such reports and

pay any contributions due to April 15 of the year following the quarters for which such reports and payments would otherwise have

been due.

D. Filing Reports Under Protest

If an employer disputes its liability, it should fill out the wage and contribution report marking it “under protest” and mail it to the

Department pending a final decision concerning its liability.

Nevertheless, if an assessment for unpaid contributions is made, it must still file a protest to the assessment in order to get a hearing

and to prevent the assessment from becoming legally final. Payment of contributions at the time the combined form is filed or the

payment of a reimbursement bill when due under protest will avoid the accrual of interest if the employer is ultimately determined

to be liable for the payment of such contributions or reimbursement.

E. Overpayments And Underpayments

In the event that an employer overpays the amount due in one quarter, it may obtain an adjustment of payment in some subsequent

quarter if it makes proper application not later than three years after the date on which the payments were erroneously paid. (Section

2201)

For refunds of overpaid contributions, penalties or interest, interest shall be paid by the Director, if such refund is not mailed within

90 days of the date of the claim for the refund. This interest is computed at the rate of 1.5 percent per month. (Section 2201.1)

In the event of an underpayment of the amounts due, outstanding amounts should be paid as promptly as possible, inasmuch as

interest accrues on all late payments and credit for FUTA purposes might also be adversely affected. (56 Ill. Adm. Code 2765.63)

The Department will send employers a statement of account. However, the employer should not wait for this statement to pay

deficiencies.

In preparing the quarterly wage and contribution report, the employer should be sure that the report is completely and accurately

filled out. It is of the utmost importance that the name, social security number and the full amount of wages paid to each worker

during the quarter be accurately listed. This same care needs to be made by employers that are required to file monthly reports.

If the Department finds an error in a wage report, it may notify the employer to file a corrected report. If the employer fails to file a

corrected and sufficient report within 30 days from the date the request for the correction was mailed to it, it must pay, in addition to

interest, the penalty for each month or part of a month (BUT NOT LESS THAN $50) on the total wages for the quarter in question.

(Section 1402)

If an employer finds an error in its wage reports, it should notify the Department.

GUIDE TO THE ILLINOIS U. I. ACT Part VI

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VI. EXPERIENCE RATING

A. Introduction

“Experience rating” is designed to perform three functions:

1. Replenish the unemployment trust fund for the amount of benefits paid from it in a recent period.

2. Control the size of the unemployment trust fund to prevent it from falling to dangerously low levels or rising to unduly high

levels.

3. Allocate the cost of fund replenishment among employers on the basis of their experience with unemployment.

These functions are accomplished through a variation in the contribution rate of each employer which has incurred liability for the

payment of contributions at the current new employer rate for the required number of years. This contribution rate is based on the

employer’s experience with the risk of unemployment.

In addition to considering the individual unemployment experience of each employer, the State also takes into consideration the

unemployment experience of the entire State in setting rates under the experience rating system. The unemployment experience of

the State is measured by a formula set by statute and adjusted depending on the financial condition of the State’s trust fund. This

percentage is known as the adjusted state experience factor.

A “fund building” surcharge is added to each employer’s computed contribution rate. (Section 1506.3) The fund building surcharge

provides for additional funds for the payment of benefits and, in times when the trust is depleted, provides a source for the

repayment of loans or bonds which might be issued to replenish the depleted fund. For 2014 through 2017, the fund building

surcharge was 0.55 percent. For each year after 2017, if there were no bonds outstanding as of October 31 of the immediately

preceding calendar year, then the fund building surcharge will float between 0.40 percent and 0.55 percent based on the rate

adjustment applicable in Section 1400.1. Under Section 1400.1, based on the prior year’s trust fund balance, the rate adjustment to

the fund building surcharge could be zero, or it could increase or decrease the fund building surcharge by 0.05 percentage point or

0.025 percentage point. For 2018, the fund building surcharge is 0.525%.

The experience rating provisions of the Unemployment Insurance Act and this chapter do not apply to nonprofit organizations or

local governmental entities for any period during which they have elected to reimburse benefits, in lieu of paying contributions.

Such employers should refer to the chapters on nonprofit and governmental entities.

For the first three consecutive calendar years in which liability for the payment of contributions is incurred, an employer that first

becomes subject to the Illinois Unemployment Insurance Act pays contributions on its taxable payroll at a rate equal to the greatest

of: (Section 1500)

1. 2.7 percent;

2. 2.7 percent multiplied by the current adjusted state experience factor;

3. The rate determined by the employer’s Economic Sector in the North American Industry Classification System (NAICS), which

is based on the average contribution rate for all experience rated employers in that specific Economic Sector (or a similar system

sanctioned by the U.S. Secretary of Labor and established by rule) (Section 1500); or

4. A rate determined in accordance with the experience rating provisions of Sections 1501 through 1507 of the Act, but only if the

employer has had at least 13 consecutive months experience with the “risk of unemployment.”

For each calendar year thereafter, so long as the employer’s liability continues, it earns a variable contribution rate. However, if in

any subsequent calendar year the employer pays NO WAGES, it will lose its variable rate and will be subject to the above

provisions for three additional years.

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The experience rating system in Illinois has four essential features:

1. It rests on the principle that the fund from which benefits are paid to eligible claimants within a given period should be

replenished in a subsequent year or years.

2. It provides that the rate of contribution for an individual employer shall be determined not only by its own experience, but also

by the benefit payment experience of the entire State. Thus, favorable experience in the State will tend to lower the rates of

employers generally, while unfavorable experience will tend to raise the rates for employers generally. (Sections 1504 and

1505)

3. It provides that, should the fund become too large, the state experience factor will be adjusted so as to scale contribution rates

downward. On the other hand, should the fund become too small, the state experience factor will be adjusted so as to scale

contribution rates upward. (Sections 1504 and 1505)

4. The amount of benefits paid to workers become the employer’s benefit charges (one of the factors governing the rate of

contributions for an individual employer) only when such workers or former workers have drawn benefits in any benefit year.

(Sections 1502 and 1502.1)

The following discussion and illustrations show how these four factors operate in determining the contribution rate applicable to an

employer.

B. Employer’s Benefit Ratio

The actual amount of benefits paid to each former worker is the numerator of the fraction which is known as the employer’s benefit

ratio.

The numerator of this fraction consists of what are called benefit charges. A benefit charge is equal to the actual amount of benefits

(including dependents’ allowances) paid to the former worker. Benefit charges are assessed only to the last employer which

employed the individual for at least 30 days from the beginning of his base period to the week for which a benefit charge is being

made.

Because there are several exceptions to this provision, it will be necessary to examine the statute to determine whether the facts of

each situation are such as to make one the chargeable employer. (Section 1502.1 and 56 Ill. Adm. Code 2765.325 et seq.)

Because benefits are charged to the single chargeable employer of the individual instead of to multiple base period employers, in

order to minimize the effect on the state experience factor, an employer’s benefit charges are multiplied by a “benefit conversion

factor” to determine the numerator of its benefit ratio. (Section 1502.2)

Total benefits paid to former employees for whom the employer is the chargeable employer

7/1/15 - 6/30/18

$90,000

Total wages subject to the payment of contributions 7/1/15 - 6/30/18

$3,000,000

Inserting the above amounts into the formula (for 1993 and each calendar year thereafter, the

Benefit Conversion Factor is 138.4 percent) yields the following:

Total Benefit Charges

X Benefit Conversion Factor $124,560

= = 4.1520 percent (Employer’s Benefit Ratio)

Total Wages Subject to the $3,000,000

Payment of Contributions

GUIDE TO THE ILLINOIS U. I. ACT Part VI

G-21 (5/19)

C. The State Experience Factor

The second factor in establishing the contribution rate of an individual employer is the state experience factor. (Section 1504) The

state experience factor is the sum of all regular benefits paid during the three-year period ending on June 30 of the year immediately

preceding the year for which a contribution rate is being determined plus the applicable “benefit reserve for fund building” divided

by the “net revenue” for the three-year period ending on September 30 of the year immediately preceding the year for which a

contribution rate is being determined. Each of these terms is defined in the Act.

Even though the Illinois experience formula is designed to replenish the fund reserved for benefit payments, there is always a

possibility that the fund might diminish to a danger point.

Similarly, it is possible that, in a period of low benefit payments in relation to contributions receipts, the fund might accumulate a

greater amount of money than may be considered reasonable.

To safeguard the fund against either depletion or excessive accumulation, the Unemployment Insurance Act provides that the state

experience factor be increased when the fund is dangerously low and decreased when it is excessively high. (Section 1505)

For every $50,000,000, or fraction thereof, by which the amount in the fund on June 30 preceding the calendar year for which

contribution rates are being computed falls below the “target balance” in the fund, the state experience factor for the year for which

contribution rates are being computed is to be increased by one full percentage point absolute. (Section 1505C)

On the other hand, for every $50,000,000, or fraction thereof, by which the fund, on that June 30, exceeds the “target balance”, the

state experience factor for the rate year is to be decreased by one full percentage point absolute. For 2005 and each calendar year

thereafter, the “target balance” is $1,000,000,000. (Section 1505C)

As an example, if the unadjusted state experience factor was 95 percent, and the fund on the June 30, 2002 was $115,000,000, the

state experience factor for that year would be adjusted upward to 108 percent for 2003. If the amount in the fund was $785,000,000,

the state experience factor would be adjusted downward to 94 percent for 2003.

The Department of Employment Security announces the adjusted state experience factor each year, usually in the month of October,

for the following rate year. The adjusted state experience factor was 112 percent for 2016, 106 percent for 2017, and 100 percent for

2018. (Section 1505D)

EXAMPLE:

The sum of all regular benefits paid plus the

applicable "benefit

reserve for funding building" for the applicable 3-year period

$3,600,000,000

"Net Revenue" for the applicable 3-

year period (accrued (not

received) during the same 3-year period as above).

$2,900,000,000

Inserting th

e above amount into the formula yields the

following:

Sum of all regular benefits paid plus

the applicable “benefit reserve for fund

building” for the applicable 3 - year period $3,600,000,000

“Net revenue” for the applicable 3 - year period $2,900,000,000

= 124 percent

State Experience

Factor

GUIDE TO THE ILLINOIS U. I. ACT Part VI

G-22 (5/19)

D. Fund Building Rate

In order to build up adequate reserves in the trust fund, for years prior to 2004, there is added to each employer’s contribution rate a

fund building rate, equal to 0.4 percent. For 2004, the “fund building” rate was 0.7 percent; for 2005, it was 0.9 percent; for 2006

and 2007, 0.8 percent; for 2008, 0.6 percent; for 2009, 0.4 percent; for 2010, 0.45 percent; for 2011, 0.5 percent; and for 2012

through 2017, 0.55 percent. The fund building rate is 0.525 percent for 2018. This rate applies to all taxable employers subject to

the Act. The increase in the “fund building” rate for 2004 and thereafter serves the dual purpose of providing adequate reserves in

the trust fund and also provides a source for the repayment of any bonds which might be issued by the Department when the trust

balance becomes so low that issuing bonds is the only alternative to borrowing the needed funds from the federal government.

Bonding may be a preferred alternative to borrowing from the federal government.

However, for employers whose total wages for insured work for a quarter are less than $50,000, that employer’s contribution rate,

including the fund building rate, shall not exceed 5.4 percent.

This limitation does not apply to a newly liable employer which has its contribution rate determined by the average rate of

employers within its Economic Sector in the North American Industry Classification System (NAICS). (Section 1506.3)

E. Computation of the Contribution Rate

The contribution rate of an employer is the product obtained by multiplying the employer’s benefit ratio for that calendar year by

the adjusted state experience factor for that same year. (Section 1506.1)

The maximum contribution rate is limited to the greater of 6.4 percent or 6.4 percent multiplied by the adjusted state experience

factor. In addition to the employer’s regular contribution rate, there will be a permanent “fund building” rate.

Because the adjusted state experience factor is 106 percent for 2017, the maximum contribution rate for 2017 was 7.35 percent (this

figure includes the 0.55 percent fund building rate). The maximum contribution rate for 2018 is 6.925 percent (this figure includes

the 0.525 percent fund building rate).

Employers whose total payroll in a calendar quarter is less than $50,000 will have a maximum rate of 5.4 percent.

For all employers that qualify for a variable rate, the minimum experience-based portion of the contribution rate is the greater of 0.2

percent or the product obtained by multiplying 0.2 percent times the adjusted state experience factor, except that, for 2012 through

2019, the experience-based portion of the contribution rate shall be 0.0 percent. (Section 1506.1) The experience-based portion of

the contribution rate is added to the applicable “fund building” surcharge (see VI. EXPERIENCE RATING). For 2014 through

2017, the minimum rate was 0.55 percent, which includes the 0.55 percent fund building rate for those same years. For 2018, the

minimum rate is 0.525 percent, which includes the 0.55 percent fund building rate.

An employer which has qualified for a variable contribution rate, has benefit charges but did not report wages for insured work for

the applicable period, shall pay at the maximum contribution rate applicable to employers for that year, plus the fund building rate.

An employer that had no benefit charges during the computation period applicable to that year, and that did not report wages for

insured work for the applicable period, shall pay at the rate applied to new employers for that year, plus the applicable fund building

rate. (Section 1506.1)

Variable contribution rates are assigned automatically. No application for a rate is necessary except where an employer has

purchased a separate part of another’s business.

When an employer sells or otherwise transfers a part of its business, there are certain conditions under which its prior experience

rating record may be transferred to the purchaser.

F. Total Transfer Of Experience Rating Record

Whenever an employer transfers substantially all of its business to another, the successor is assigned the entire experience rating

record of the predecessor. (Section 1507)

This record includes all years during which liability for the payment of contributions was incurred by the predecessor, all benefit

charges, and all wages for insured work on which the contributions were paid by the predecessor.

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If the purchasing employer previously had a contribution rate assigned to it for the calendar year in which the purchase occurs, such

rate will be continued for it for the balance of the year. If no rate had previously been determined for the successor employer, the

predecessor’s contribution rate will be assigned to it for the calendar year in which the purchase occurs.

In subsequent years, the consolidated experience rating records of both employers will be the basis for computing the successor’s

contribution rate.

G. Partial Transfer of Experience Rating Record

Provision is made in the law for the partial transfer of an experience rating record under certain conditions. (Section 1507B)

Such provision applies to the employer that has transferred substantially all of its business to another, but retains a distinct severable

portion.

Likewise, the provision permits the purchaser of less than substantially all of another’s business to acquire a portion of the

predecessor’s experience rating record, if the purchaser has succeeded to a distinct severable portion.

The conditions that must be met before partial transfer of an experience rating record is permitted are:

1. The portion of the business retained or transferred must be distinct and severable. Only under such conditions can the experience

rating record of the portion be identified and segregated.

2. Unlike total transfers of experience rating records, partial transfers are not mandatory. Accordingly, a partial transfer cannot be

put into effect unless it is preceded by a joint application for such transfer by all parties whose interest would be affected by it.

3. Since a partial transfer can possibly be used as a device to shift poor experience with unemployment risk by the reorganization of

an employing unit or by splitting it into two or more employing units, the Act provides that if the parties to a reorganization are

owned or controlled by the same interest, and if a partial transfer is approved, they are to be treated, while so affiliated, as a

single unit for the purpose of determining their contribution rates.

The law provides time limits for the filing of an application for partial transfer.

The application must be filed prior to whichever of the following is the LATEST:

1. One year after the date of the transfer of the business;

2. The date the contribution rate determination of the applicant became final for the year following the year in which the transfer of

the business occurred.

Employers that contemplate filing applications for a partial transfer of experience rating records are urged to examine carefully all

implications of such action.

THE FILING OF A TIMELY APPLICATION CANNOT AFFECT ANY CONTRIBUTION RATE DETERMINATION THAT

HAS BECOME FINAL.

The contribution rates of both the predecessor and the successor may be affected either favorably or unfavorably depending on the

nature of the benefit experience to be transferred. Under the law, once an application for partial transfer has been approved, it

becomes final as to all parties to the application.

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H. Revision of the Statement of Benefit Charges

The Department of Employment Security mails to each employer liable for the payment of contributions, a quarterly Statement of

Benefit Charges that have been entered on its experience rating record. An employer has 45 days from the date of mailing of the

Statement of Benefit Charges within which to file an application for its revision. (Section 1508)

In the absence of such application for revision, the statement is final and conclusive.

Upon receipt of a sufficient and timely application for revision, the Director rules thereon, denying or allowing it on the merits of

the allegations presented in support of revision.

If the application is denied, the Director shall issue an order to that effect, which becomes final and conclusive at the expiration of

20 days from the mailing date of the order. However, within the 20-day period, the employer may file a written protest and petition

for hearing specifying its objections to the order.

Upon receipt of a sufficient petition, that is, one which states a legal or factual basis for relief, either relief will be granted or a

hearing will be scheduled before a representative of the Director. This hearing is conducted in a manner similar to hearings on

Assessments and Claims For Refunds.

An employer does not have the right to object to benefit charges shown on the Statement of Benefit Charges unless it can show that

such benefit charges arose as a result of benefits paid to a worker in accordance with a finding, determination or a Referee’s

decision, to which such employer was a party entitled to notice thereof, and that it was not notified as required by the appropriate

provisions of the Act.

However, in no case is an employer precluded from alleging at the hearing that the statement of benefit charges is incorrect by

reason of clerical error made by the Director or any Department employees.

Benefit charges shall be canceled if the employer proves that the Department failed to give notice of any of the following:

1. A notice of claim to the last employing unit,

2. A nonmonetary determination or a Referee’s remanded decision,

3. A reconsidered finding or a determination,

4. A Referee’s decision allowing benefits, or,

5. A decision of the Director or the report of the Director’s representative involving a labor dispute.

For a charge to be canceled, notice must not have been given within 180 days of the relevant date prescribed by the Act, and the

failure to give notice must have directly resulted in the payment of benefits and hence have caused the benefit charges to accrue to

the employer’s experience rating record. (Section 1508.1)

I. Review of a Notice of Contribution Rate

Each employer, except nonprofit and local governmental entities that have elected to reimburse benefits in lieu of contributions, is

notified each year of its contribution rate for such year. (Section 1509)

This notice is usually mailed at the end of the year prior to the one for which it applies. A contribution rate is final and conclusive

upon the employer unless, within 15 days after the date of mailing of the notice of such rate, the employer files an application for its

review. Such application must state the employer’s reasons for its belief that the assigned contribution rate is incorrect.

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Upon receipt of a sufficient application for contribution rate review (56 Ill. Adm. Code 2725.105), if the application is allowed, the

contribution rate will be corrected and, if the rate changes, notice of the correction mailed to the employer.

In the event the application is denied, the Director will issue an order to that effect. Such order is final and conclusive at the

expiration of 10 days from the date of mailing of such order, unless, within the 10-day period, the employer files a written protest

and petition for hearing, specifying its objections to the order. These objections must state a legal and factual basis for relief.

Upon receipt of a sufficient protest and petition for hearing, either relief will be granted or a hearing will be scheduled before a

representative of the Director. The hearing is conducted in a manner similar to that provided by the Act for determination and

assessment hearings. At this hearing, the employer may present witnesses and exhibits to establish its contentions. (56 Ill. Adm.

Code 2725.250)

Upon conclusion of the hearing, the Director’s Representative submits to the Director a report and recommendation for disposition

of the matter. A copy of this report is mailed to the employer.

The employer has the right to file specific objections to the representative’s report within 20 days after the report’s mailing date. (56

Ill. Adm. Code 2725.275)

If no objections are filed within the time allowed, the recommendation of the Director’s Representative becomes the Director’s

Decision without further action by the Director.

Upon receipt of the objections to the report, the Director issues a decision and gives notice by mail of such decision to the

employer. (56 Ill. Adm. Code 2725.280)

This decision is final and conclusive unless review is requested in the courts under the Administrative Review Act.

J. SUTA Dumping

If an individual or entity transfers all or a portion of its trade or business and there is any substantial common ownership,

management or control of the transferor and transferee, the experience rating records attributable to the transferred trade or business

shall be transferred to the transferee, except that, if the transferor or transferee had a contribution rate applicable to it for the

calendar year in which the transfer occurred, it shall continue with that contribution rate for the remainder of the calendar year and,

and if the transferee had no contribution rate applicable to it for the calendar year in which the transfer occurred, the contribution

rate of the transferee shall be the same as the contribution rate of the transferor for the remainder of the calendar year. Additionally,

if an individual or entity that is not an employer under the Act acquires the trade or business of any employing unit, the experience

rating record of the acquired business shall not be transferred to the individual or entity if the Director finds that the individual or

entity acquired the business solely or primarily to obtain a lower contribution rate. Violations of this provision carry substantial

penalties. An individual or entity that knowingly advises another in a way that results in a violation of this provision can be found

guilty of a Class B misdemeanor and be subject to an administrative penalty of $10,000 per violation. (Section 1507.1).

GUIDE TO THE ILLINOIS U. I. ACT Part VII

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VII. PROTESTS AND HEARINGS ON ASSESSMENTS AND REFUNDS

A. Protests

When an employer fails to pay contributions or to reimburse benefits as required by the law, the Director makes an assessment

which includes the amounts due, interest, and if the employer has failed to file wage reports on time, penalties. (Section 2200)

An employer that disagrees with an assessment by the Director must file a protest and petition for hearing. This protest must be in

writing, set forth the specific reasons why the employer contends that the assessment is incorrect and must include a legal and

factual basis for relief. (56 Ill. Adm. Code 2725.110)

The written protest must be filed with the Department within 20 days after a notice of the assessment is mailed to the employer. This

protest must be delivered in person, postmarked, or filed on MyTax Illinois within the 20-day period (see X. FORMS AND

REPORTS REQUIRED). While the law does not require it, it is advisable to send such a protest by certified mail and obtain a

receipt, since the employer bears the risk of nondelivery.

If a timely protest is not filed, the assessment will become final, and the employer will have lost its right to deny liability for the

amounts allegedly due.

An employer that disagrees with an assessment by the Director may avoid the possible further accumulation of interest by paying

the contributions or making the reimbursement due, together with the accrued interest to date, and filing a claim for refund of such

payment. (Section 2201)

If the claim for a refund is denied, the employer may petition within 20 days after the notice of the denial is mailed. This will serve

the same purpose as a protest to an assessment, and the payment prevents the further accumulation of interest. However, the

employer must not let the assessment become final, or it will lose its right to question its liability for the contributions

assessed.

In the event the employer does not wish to pay the contributions or the reimbursement amount and file a claim for refund, but does

wish to avoid the filing of a lien against its property by the Director, it may furnish a bond supplied by an authorized bonding

company in the amount of 125 percent of the sum of the contributions or the reimbursement amount, interest and penalties allegedly

due. (Section 2401D)

An employer that believes it has paid contributions or amounts in reimbursement of benefits, interest or penalties in error may file

with the Director a claim for adjustment or refund within three years after the date on which such payments were made, provided

that the payments were not made pursuant to an assessment that became final.

Note: Whenever an employer purchases another business or the assets of another business, it should obtain a certificate from the

Director that the seller does not owe contributions, penalties or interest to the Director. Without such a certificate, the purchaser

may be liable for the unpaid debt. Since the Director was not a party to the purchase agreement, this is true even if the purchase

agreement provides that the purchaser is not liable for the debts of the seller. (Section 2600)

The claim for adjustment or refund form can be obtained on-line or from:

Illinois Dept. of Employment Security

Employer Hot Line

33 South State Street

Chicago, Illinois 60603

(800)247-4984

After an investigation has been made, an order is entered either allowing or denying the claim in whole or in part. If the claim is

denied either in whole or in part, a notice of such denial is mailed to the employer.

The denial becomes final and cannot be contested unless the employer files a written protest and petition for hearing within 20 days

from the date of mailing of the notice of denial.

All or any part of any penalty or interest may be waived by the Director for good cause shown. (Sections 1401, 1402, and 56 Ill.

Adm. Code Section 2765.65)

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An employer has 30 days from the date that the late payment or delayed report became due or from the date of mailing of the notice

that such payment or report was untimely, whichever is later, to file a sworn written application for waiver of the interest and/or

penalty.

An application is not complete unless it contains the name and address of the employer, the UI account number, the period involved

and the reasons for the waiver. The Director will issue an order granting or denying the waiver. An employer has 20 days from the

date the order is mailed in which to file an appeal to such order.

B. Hearings

Telephone or in-person hearings on assessments or denials of a claim for refund are held by hearing officers as representatives of

the Director. (56 Ill. Adm. Code 2725.220) The General Assembly, with the approval of the Governor, has allocated one

million dollars to provide free legal assistance to “small employers” (less than 20 employees during two of the four quarters

preceding the request for free assistance) at Departmental hearings. To implement this provision, the Department

contracted with a private law firm to provide this assistance. A contact telephone number is printed on decisions, orders,

etc., the appeals of which are covered by this program.

After hearing the evidence, the Director’s Representative files a report with the Director, summarizing the evidence and making a

recommendation to the Director that the assessment be either affirmed, modified, canceled, or that the claim for refund be allowed,

denied or allowed in part.

A copy of this report is sent to the employer, which may file specific objections to it within 20 days after the date of mailing of such

report. A 10 day extension can be granted if requested in writing within 10 days of the date of mailing of the report and

recommended decision.

If no objections are properly filed or if the Director does not modify or cancel the assessment on his own motion within the 20-day

period, the recommended decision becomes the final decision of the Director.

If objections are filed, the Director will issue a decision that may either adopt the report of the Director’s Representative or modify

it in accordance with the evidence and the law.

If the Director issues a decision after the hearing either affirming an assessment in whole or in part, the employer may obtain

judicial review of the decision under the Administrative Review Act by filing a complaint in the Circuit Court of the County in

which the hearing was held. This complaint must be filed within 35 days from the date the decision was mailed.

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VIII. STATE OF ILLINOIS AND LOCAL GOVERNMENTAL ENTITIES

In 1972, the Unemployment Insurance Act was amended to extend its coverage to the State and each of its instrumentalities.

In 1978, coverage under the Illinois Unemployment Insurance system was extended to workers employed by local governmental

entities. Although these entities continue to be exempt from the taxing provisions of the Federal Unemployment Tax Act, they are

required to pay contributions under Illinois law. (Section 1405)

However, they may elect, instead, in lieu of paying contributions, to reimburse the State for the actual amount of any benefits paid

to their former workers. (Section 1405)

Local governmental entities electing to reimburse benefits, like all other employers, are required to file quarterly Wage Reports

listing the name and social security number of each worker and the total wages paid to each worker for employment during the

calendar quarter. (Section 1400)

Consequently, employees of the State and its instrumentalities and of local governmental entities, unless their services are

specifically excluded from coverage, can qualify for benefits on the basis of the wages paid them by their employers, if they meet

the eligibility requirements set forth in the law. The rights and responsibilities of governmental employees with respect to

unemployment benefits do not differ from those of other workers.

A. Definition of Local Government Entities

The law defines a local governmental entity as any political subdivision or municipal corporation of this State or any of its

instrumentalities, or an instrumentality of more than one of the foregoing, or any instrumentality of any of the foregoing and one or

more other states or political subdivisions. (Section 211.1)

Local governmental entities are “employers” subject to the Act REGARDLESS of their past or current employment experience, the

number of workers providing services for them, the size of their payroll or the fact that the governmental unit is exempt from the

Federal Unemployment Tax Act pursuant to Section 3306 (c)(7) of that Act.

All local governmental entities are subject to the Unemployment Insurance Act. However, the law excludes from coverage as

“employment” certain services performed in the employ of such entities. No taxes are assessed and no benefits become payable with

respect to the excluded services.

B. Services Excluded from Employment

Individuals who provide services for a governmental unit are in the insured employment of that employing unit regardless of

whether they are full time, part time, or temporary workers, or whether they receive wages in cash or in any other form of

remuneration.

However, certain services are excluded from insured employment pursuant to specific exemptions under the law. (Section 220)

When services are excluded, individuals performing such services are not considered in insured employment.

An individual’s service for a governmental entity is excluded if it falls within any of the following exceptions

Sections 205, 211.1, 220 and 1405 of the Act were amended and Section 205.1 was added by Public Act 92-0555.These changes were made to

comply with the Federal Unemployment Tax Act as amended by the Consolidated Appropriations Act. These Sections were amended to consider service

performed in the employ of an Indian tribe as employment. In addition, the amendment to Section 1405 allows Indian tribes to elect to make payments

instead of contributions.

Exclusions similar to 1, 2, 4, 5, 6, 7 and 8 apply to service in the employ of an Indian tribe. (Section 220)

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1. As an elected official; (Section 220)

. As a member of a legislative body, or a member of the judiciary of this State or a political subdivision or municipal corporation;

(Section 220)

3. As a member of the Illinois National Guard or Air National Guard; (Section 220)

a worker serving on a temporary basis in case of fire, storm, snow, earthquake, flood or similar emergency; (Section 220

)

5. I

n a position that, under or pursuant to the laws of this State, is designated as a major nontenured policymaking or advisory

position, or as a policymaking position the performance of the duties of which ordinarily does not require more than eight hour

a week; (Section 220)

a part of an unemployment work relief or work-training program assisted or financed in whole or in part by any federal

agency or agency of this State, or a political subdivision or municipal corporation, by an individual receiving such work relief or

work training; (Section 220)

In a facility, in a program conducted for the purpose of the rehabilitation of individuals whose earning capacity is impaired by

age or physical or mental deficiency or injury or a program providing remunerative work for individuals who because of their

impaired physical or mental capacity cannot be readily absorbed in the competitive labor market, by an individual receiving

such rehabilitation or remunerative work; (Section 220)

y an inmate of a custodial or penal institution; (Section 220)

In the employ of a school, college or university, by a student who is enrolled and is regularly attending classes at such school,

college or university, or by the spouse of such a student, if the spouse is advised, at the time the spouse commences to perfor

such services, that:

he employment of the spouse to perform such services is provided under a program to provide financial assistance to the

student by the school, college or university, a

b. such employment will not be covered by any program of unemployment insurance; (Section 224)

10.

By an individual who is enrolled at a nonprofit or public educational institution, which normally maintains a regular faculty a

urriculum and normally has a regularly organized body of students in attendance at the place where its educational activities

are carried on, as a student in a full-time program, taken for credit at such institution, which combines academic instruction with

work experience, if such service is an integral part of such program, and such institution has so certified to the employer, except

that the exemption shall not apply to service performed in a program established for or on behalf of an employer or group of

employers; (Section 227)

11. I

n the employ of a hospital, if such service is performed by a patient of the hospital; (Section 230)

12. As a student nurse in the employ of a hospital or a nurses’ training school by an individual who is enrolled and is regularly

ttending classes in a nurses’ training school approved pursuant to the Illinois Nursing Act; (Section 230)

13. A

s an intern in the employ of a hospital by an individual who has completed a four-year course in a medical school chartered or

approved pursuant to State law. (Section 230)

14. As

an election judge or election official if the individual’s remuneration for such service is less than $1,000 during the calendar

year.

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C. Financing Benefits Paid to State Employees

enefits paid to State employees on the basis of wages paid to them by the State or any of its instrumentalities are financed by

appropriations to the Illinois Department of Employment Security. (Section 1403)

Quarterly wage reports, listing the social security account numbers and names of State employees and the wages paid to each of

them during each calendar quarter, will be filed with the Revenue Division of the Department of Employment Security by the

Auditor of Public Accounts and the State universities.

henever an individual who has worked for the State of Illinois files a claim for benefits, notice of the filing of the claim will be

mailed to the Department, institution, agency or instrumentality where he worked.

henever the recipient of the notice has information that may raise a question as to the individual’s eligibility for benefits, it should

transmit the information to the Department of Employment Security at the address and within the time limit shown on the notice.

D. T

ax Rates and Experience Rating

less a local governmental entity elected to become a self-insurer by reimbursing the State for any benefits paid, the local

governmental entity is required to pay contributions on the same basis as a non-governmental employer.

governmental entity that has elected to be a reimbursable employer that continues to provide less than full time work to an

individual who has applied for benefits due to a separation from other employment will not be subject to payments in lieu of

contributions if the employer requests to have the charge removed.

his continued part time employment must continue after the end of the individual’s base period and during the applicable benefit

year on the same basis as prior to the individual’s separation. (Sections 1405B and 1501F)

enefit Reimbursement Option

ach local governmental entity has the right to elect to be reimbursable by agreeing, in lieu of paying contributions, to reimburse

the State for the actual amount of regular benefits and 100 percent of the extended benefits paid to its former workers if it was both

the last employer and a base period employer of a worker and to reimburse 50 percent of these amounts if the entity was the last

employer but not a base period employer of a worker. (Section 1405)

f a local governmental entity elects reimbursable status, the amount that it will have to pay cannot be readily predicted because the

local governmental entity must reimburse for the actual benefits paid its former workers. The amount of such reimbursement will

depend upon the number of the entity’s workers who become unemployed, the duration of their unemployment, the number of such

workers who file claims for benefits and the amount of total benefits paid to them.

ach local governmental entity before electing to be reimbursable should examine its experience with labor turnover and the

average duration of unemployment of its separated workers before they find other work.

Because the amount of benefits depends on the amount of wages the individual was paid during the individual’s base period

(Section 237), and upon whether or not he has certain specified dependents, it might be helpful to the entity to determine the

average weekly wage and the average number of dependents of its workers.

ime Limits for Electing Reimbursement

A n

ewly created governmental entity is allowed 30 days immediately following the end of the calendar quarter in which it first

becomes subject to the Act to file its written election to make payments in lieu of contributions. (Section 1405B2)

Newl

y-created local governmental entities or entities that have previously not incurred liability for at least two calendar years may

elect reimbursement for one year. All others must elect for a minimum of two years.

hanging From Contribution to Reimbursement

local governmental entity that has incurred liability for the payment of contributions for at least two calendar years and is not

delinquent in the payment of such contributions or in the payment of any interest or penalties that may have accrued may elect to

reimburse benefits in lieu of paying contributions beginning with January 1 of any calendar year.

he written election to change to the reimbursement basis must be filed before that January 1. The new election cannot be for a

period of less than two years. Such an organization remains liable for any contributions due for any calendar quarter prior to the

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effective date of the election. (Section 1405B3 and 1405B4)

H. Changing from Reimbursement to Contributions

A local governmental entity that elected to reimburse benefits may terminate its election with respect to any year after the required

minimum period (see “Time Limits for Electing Reimbursement” in this Section) provided it files a written notice to that effect

before January 1 of the year for which it wishes to terminate its election.

A local governmental entity that changes from reimbursement to contributions will be required to pay contributions quarterly

commencing with the first calendar quarter of the year for which the change is effective.

The entity will continue to be liable for reimbursement of any benefits paid to its former workers on and after the effective date of

the change if the organization was the individual’s “last employer” during a benefit year beginning prior to the effective date of the

change. (Sections 1405B 5 and 1404A 5)

I. Allocation of Reimbursement Costs

When an unemployed worker first files a claim for benefits, he establishes his own “benefit year.” (Section 242)

His eligibility for benefits and the amount of benefits payable to him during this one year period depends on the amount of wages

for employment he was paid during his “base period” by employers subject to the law. (Section 237)

A worker’s base period consists of the first 4 of the last 5 completed calendar quarters preceding the first day of his benefit year,

except, if an individual does not qualify for the maximum weekly benefit amount due to his receipt of either workers’ compensation

or occupational disability payments during the base period determined above, he would be eligible to have his benefits calculated in

accordance with an alternative base period. A worker’s base period can also consist of the last four completed calendar quarters

preceding the first day of his benefit year if he does not qualify for benefits based on the “standard” base period above. (Section

237)

When an individual has worked during his base period for a reimbursement employer and the reimbursement employer is also the

individual’s chargeable employer, the reimbursement employer will be liable for 100 percent of the cost of the benefits paid to the

individual (including dependents’ allowance).

If the reimbursing employer is the chargeable employer but not a base period employer, then it will be liable for only 50% of the

cost of the benefits paid to the individual (including dependents’ allowance). (Sections 1404A and 1405B)

EXAMPLE: The individual is a substitute teacher for a school district, a local governmental entity that has elected to make

payments in lieu of contributions. She did not, however, work for the school district during her base period.

If she now files a claim for benefits and the school district is her chargeable employer, it will be liable for 50 percent of any

payments in lieu of contributions which would result if she would be paid benefits. This is because the school district is the

last employer for at least 30 days prior to the beginning of her claim. The employer is only liable for 50 percent of the amount

of the benefits paid because the individual performed no services for this employer during her base period.

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J. Reimbursement of Benefits Erroneously Paid

A local governmental entity that has elected to reimburse benefits is required to reimburse the State for ALL benefits paid to its

former workers, INCLUDING ANY BENEFITS ERRONEOUSLY PAID. If the erroneous payment has been recovered by the

State after the local governmental entity has made reimbursement of the amount so paid, an adjustment or refund will be made to

the entity. (Section 1404B5)

K. Payment of Reimbursement

As soon as possible, following the close of each calendar quarter, a local governmental entity that has elected to reimburse benefits

will receive a Statement of the amount due from it for the benefits paid to its former workers during the calendar quarter.

The Statement will contain the name of each person to whom payments have been made as well as the amount of benefits paid to

him that is chargeable to the local governmental entity. (Section 1405C)

The local governmental entity has the right to apply to the Director for a revision of a Statement within 20 days. If it is not satisfied

with the disposition of its request for revisions, it may petition within 20 days for a hearing before a representative of the Director.

(Sections 1508, 1404B and 1405C)

The local governmental entity has 30 days from the mailing date of the Statement to pay the amount due. (Section 1508)

A failure to pay any amount due within 30 days from the date of mailing of the Statement will result in an interest charge on the

sums due at the rate of 2 percent per month. (Section 1401) All remedies available to the Director for collecting contributions due to

the State are available for the collection of reimbursement payments. (Sections 2206, 2206.1, 2200, 2207, 2401, 2404, 2600 and

2800)

L. Group Accounts

Two or more local governmental entities that have elected to reimburse benefits may file a joint application for the establishment of

a group account effective January 1 of any calendar year, for the purpose of sharing the cost of benefits paid on the basis of the

wages paid by such organizations. (Sections 1405D and 1404E)

A joint application for a group account must meet the following criteria:

1. The application must be filed prior to that January.

2. The application must designate a group representative to act as the group’s agent for this purpose.

3. The group account must remain in effect for a minimum of two calendar years.

4. The group will be liable for reimbursement due from all of its members.

5. The amount due from any member of the group if a delinquency occurs with respect to any calendar quarter will be the same

ratio to the total amount due as the total wages for insured work paid by the member in the same calendar quarter bears to the

total wages for insured work paid in the quarter by all members of the group.

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IX. NONPROFIT ORGANIZATION

Prior to 1972, nonprofit organizations established and operated exclusively for religious, charitable, scientific, literary or

educational purposes were exempt from compulsory coverage under the Illinois Unemployment Insurance Act. However, these

organizations could provide coverage for their employees on a voluntary basis.

The Federal Employment Security Amendments of 1970 contained a requirement that each state extend the coverage of its

unemployment insurance system to these organizations. The Illinois Unemployment Insurance Act was amended accordingly,

effective January 1, 1972.

Although these nonprofit organizations continue to be exempt from the taxing provisions of the Federal Unemployment Tax Act,

they are required to pay contributions under the Illinois law. However, these organizations may elect, instead, to reimburse the State

for the benefits paid to any of their workers.

A. Definition of Nonprofit Organization

The Unemployment Insurance Act sets forth a definition of a “nonprofit organization”. A nonprofit organization that does not meet

the elements of this definition is subject to the Act as an “ordinary” employer. Others may remain exempt from its coverage. It is

important that each element of the definition be carefully analyzed.

The law defines a “nonprofit organization” as a corporation, community chest, fund or foundation (Section 211.2):

1. which has or had in employment four or more workers within each of 20 or more calendar weeks within either the current or

preceding calendar year; AND

2. which is defined as a “nonprofit organization” under Section 501(c)(3) of the Internal Revenue Code of 1986 as exempt from

federal income tax under Section 501(a) of that Code; PROVIDED

3. that the services performed for the organization are excluded from the definition of “employment” under the provisions of

Section 3306(c)(8) of the Federal Unemployment Tax Act.

Services excluded from the definition of “employment” under Section 3306(c)(8) of the Federal Unemployment Tax Act are those

performed for organizations listed in Section 501(c)(3) of the Internal Revenue Code as exempt from federal income tax.

A nonprofit organization exempt from federal income tax under a paragraph of the Internal Revenue Code other than 501(c)(3)

cannot meet the definition of “nonprofit organization” and is treated as an “ordinary” employer under the Illinois law.

The material that follows is directed only to those organizations that meet the conditions of paragraphs 2 and 3 above. If your

organization does not meet these conditions, it is an “ordinary” employer, and not a “nonprofit organization.”

B. Employment Of “Four Or More Workers Within Twenty Weeks”

Each “nonprofit organization” that meets the conditions set forth in paragraphs 2 and 3 above, and that has had four or more

workers in employment within each of 20 or more calendar weeks within either the current or preceding calendar year is subject to

the law. (Section 211.2)

A nonprofit organization that is not subject to the law because it has not had in employment at least four workers in 20 weeks in a

calendar year may elect coverage for a minimum of 2 calendar years.

If the election is approved by the Director, the organization is entitled to the same options available to those employers mandatorily

covered by the law. (Section 302)

There are other circumstances under which an exempt organization may become subject to the law.

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An organization that purchases or acquires the organization, trade or business of an employer already subject to the law becomes

also subject at the time of such acquisition. (Section 205D)

henever a nonprofit organization acquires the assets or business establishment of another employing unit and continues its

activities, the number of weeks in which the purchasing organization has had four or more workers will be added to the number of

weeks in which the former organization had 4 or more workers.

f the total makes 20 or more weeks in the calendar year, the purchasing organization will be subject to the law for that year (from

the date of acquisition) and for at least the following year.

xclusions From Employment

o determine whether a nonprofit organization has had four or more workers in at least 20 weeks, the organization must count all

fulltime, part-time and temporary workers, regardless of whether they received cash wages or other forms of remuneration. All

individuals who performed services for the organization must be counted, unless such services are specifically excluded under the

law.

ndividuals performing the following services need not be counted to determine liability:

1. I

n the employ of a church or convention or association of churches, or an organization or school that is not an institution of

higher education, operated primarily for religious purposes and that is operated, supervised, controlled or principally supported

by a church or convention or association of churches. (Section 211.3A)

2. B

y a duly ordained, commissioned, or licensed minister of a church in the exercise of duties required by such order. (Section

211.3B)

3. In a facility conducted for the purpose of carrying out a program of rehabilitation for individuals whose earning capacity is

mpaired by age or physical or mental deficiency, or providing remunerative work for individuals who, because of their

impaired physical or mental capacity, cannot be readily absorbed in the competitive labor market, by an individual receiving

such rehabilitation or remunerative work.

4. As part of an unemployment work relief or work-training program assisted or financed in whole or in part by any federal agency

or an agency of a State or political subdivision or municipal corporation thereof, by an individual receiving such work relief or

work-training. (Section 211.3E)

5. B

y an inmate of a custodial or penal institution. (Section 211.3F)

In the employ of a school, college or university, by a student who is enrolled and is regularly attending classes at such school,

college or university or by the spouse of such a student if the spouse is advised, at the time the spouse commences to perfor

uch service:

he employment of the spouse to perform such service is provided under a program to provide financial assistance to th

student by the school, college or university, and

b. s

uch employment will not be covered by any program of unemployment insurance. (Section 224)

n the employ of a hospital, if such services are performed by a patient of the hospital. (Section 230)

8. A

s a student nurse in the employ of a hospital or a nurses’ training school by an individual who is enrolled and is regularl

ttending classes in a nurses’ training school approved pursuant to the Illinois Nursing Act. (Section 230)

9. A

s an intern in the employ of a hospital by an individual who has completed a 4 year course in a medical school chartered or

approved pursuant to State law. A “resident” is not an intern. (Section 230)

10. I

n any calendar quarter in the employ of any organization exempt from income tax under Section 501(a) of the Federal Internal

Revenue Code (other than an organization described in Section 401(a) of the Internal Revenue Code), or under Section 521 of

the Internal Revenue Code, if the remuneration for such service is less than $50 for the calendar quarter. (Section 223)

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D. Tax Liability

A nonprofit organization that does not elect to reimburse the State for the actual amount of benefits paid to its former workers is

required to pay contributions on its taxable payroll. (Section 1404) All newly liable employers, including nonprofit organizations,

are required to pay contributions at a fixed rate for the first three calendar years of coverage (see V. RATE OF CONTRIBUTION).

The taxable payroll is limited to a maximum amount of wages paid to each worker by each employer in a calendar year. (Section

235)

For years prior to 1988, due to a depletion in the Illinois unemployment trust fund (which necessitated borrowing from the federal

government), an emergency surcharge was enacted by the Illinois legislature. (Section 1506.2)

Though all borrowings were repaid, in order to avoid future borrowing for years after 1987, a permanent “fund building” surcharge

was enacted, and the emergency surcharge was repealed. Because the trust fund was again depleted in 2003, effective with the

contributions due for the fourth quarter of 2003, the “fund building” surcharge can be used to repay bonds issued by the Department

to avoid the need to borrow from the federal government.

After the third calendar year of coverage, an employer pays contributions at rates determined for each year under the experience

rating provisions of the Act. These provisions set forth a formula giving consideration to the employer’s experience with the risk of

unemployment of his workers.

E. Benefit Reimbursement Option

Each nonprofit organization subject to the Act has the right to elect to be a reimbursable employer by agreeing, in lieu of paying

contributions, to reimburse the State for the actual amount of regular benefits and one-half the amount of extended benefits paid to

its former workers who meet the eligibility requirements of the law. (Section 1404A)

If a nonprofit organization elects to be a reimbursable employer, the amount that it will be required to pay to the State cannot be

readily predicted.

Since the nonprofit organization would have to reimburse the State for the actual benefits paid to the organization’s former workers,

the amount of such reimbursement would depend upon the number of the organization’s workers who become unemployed, the

duration of their unemployment, the number of such workers who file a claim for benefits, and the amount of the weekly and total

benefits paid to them.

Before electing to be a reimbursable employer, the nonprofit organization should examine its experience with labor turnover.

F. Time Limits For Electing Reimbursement

A nonprofit organization that becomes subject to the Act is allowed 30 days immediately following the end of the calendar quarter

in which it first becomes subject to the Act to file its written election to make payments in lieu of contributions. (Section 1404A2)

EXAMPLE: Z private Secondary School was in existence and had at least four workers in each of 20 weeks or more in 2016

during which time the school was liable as a “regular” employer.

Effective January 1, 2017, the school receives a Section 501(c)(3) tax exemption from the Internal Revenue Service. It has

until 30 days following the end of the quarter in which it becomes a nonprofit employer, as defined by the Act, to elect

reimbursement, i.e. the quarter in which it first has at least four workers in each of 20 weeks for the year.

Election of reimbursement of benefits for a minimum of one calendar year is permissible only for newly created nonprofit

organizations. In all other instances, an election of reimbursement of benefits must be for a minimum of two calendar years.

(Section 1404A 1)

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G. Filing of Quarterly Wage Reports

Nonprofit organizations electing to reimburse benefits, like other employers, are required to file quarterly and, if they had 25 or

more employees during the preceding calendar year, monthly Wage Reports listing the name and social security number of each

worker and the total wages paid to him for employment during the calendar month or quarter. (Section 1400) An employer who fails

to file a monthly or quarterly Wage Report by the due date (the last day of the month following the calendar month or quarter) is

subject to a penalty. (Section 1402)

H. Changing From Contributions To Reimbursement

A nonprofit organization that has incurred liability for the payment of contributions for at least two calendar years and is not

delinquent in the payments of such contributions or in the payment of any interest or penalties which may have accrued, may elect

to reimburse benefits in lieu of paying contributions beginning with January 1 of any calendar year. A nonprofit organization that

has entered into a repayment agreement is DELINQUENT in the payment of contributions until the amounts due are paid in full.

Such organization is not eligible to elect reimbursement.

The written election to change to the reimbursement basis must be filed before such January 1. The new election cannot be for a

period of less than two years. Such an organization remains liable for any contributions due for any calendar quarter prior to the

effective date of the election. (Section 1404)

A nonprofit organization that has elected to reimburse benefits and continues to provide less than full-time work to an individual

who has applied for benefits due to a separation from other employment will not be subject to payments in lieu of contributions if

the employer has so requested.

This continued part-time employment must continue after the end of the individual’s base period and during the applicable benefit

year on the same basis as prior to the individual’s separation. (Section 1404B 7)

A similar provision applies to payments made with respect to benefit years beginning on or after July 1, 1989. (Section 1404B 7)

I. Changing From Reimbursement To Contributions

A nonprofit organization that elected to reimburse benefits may terminate its election with respect to any year after the expiration of

the minimum period of election (See “Time Limits for Electing Reimbursement” in this Section), provided it files a written notice to

that effect before January 1 of the year for which it wishes to terminate its election. (Section 1404A 5)

A nonprofit organization that changes from reimbursement to contributions will be required to pay contributions quarterly

commencing with the first calendar quarter of the year for which the change is effective.

The organization will continue to be liable for reimbursement of any benefits paid to its former workers, on and after the effective

date of the change if the organization was the individual’s “last employer.” (Section 1404C)

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J. Allocation Of Reimbursement Cost

When an unemployed worker first files a claim for benefits, he establishes his own “benefit year.” (Section 242)

His eligibility for benefits and the amount of benefits payable to him during this one year period depend on the amount of wages for

employment he was paid during his “base period” by employers subject to the law. (Section 237)

A worker’s base period consists of the first 4 of the last 5 completed calendar quarters preceding the first day of his benefit year

(See “Allocation of Reimbursement Costs” in VIII. STATE OF ILLINOIS AND LOCAL GOVERNMENTAL ENTITIES).

Whenever a nonprofit organization on the reimbursement method is the individual’s “last employer” and it is also a base period

employer, it will be liable for 100 percent of the benefits paid to the individual. If it is the “last employer” but not a base period

employer, it will be liable for 50 percent of the payments paid to the individual. (Section 1404A)

In some instances, a nonprofit organization may be both a contributions employer and a reimbursement employer during a worker’s

base period. This can occur when the base period covers quarters in two calendar years and the organization has elected to change

its method of payment at the close of the earlier calendar year. In such case, it would be liable for either payments in lieu of

contributions or benefit charges depending on its status at the time that the claim was filed.

K. Reimbursement Of Benefits Erroneously Paid

A nonprofit organization that has elected to reimburse benefits is required to reimburse the State for all benefits paid to its former

workers, INCLUDING ANY BENEFITS ERRONEOUSLY PAID, unless the erroneous payment has been recovered by the State.

If the erroneously paid benefits are recovered by the State after the nonprofit organization has made reimbursement of the amount

so paid, an adjustment or refund will be made to the organization. (Section 1404B 5)

L. Payment Of Reimbursement Due

As soon as possible following the close of each calendar quarter, a nonprofit organization that has elected to reimburse benefits will

receive a Statement of the amount due from it for the benefits paid to its former workers during the calendar quarter. The Statement

will contain the name of each person to whom payments have been made, and the amount of benefits paid to him that is chargeable

to the nonprofit organization. (Sections 1404 and 1508)

The nonprofit organization has the right to apply for a revision of the Statement within 20 days. If it is not satisfied with the

disposition of its request for revision, it may request a hearing before a representative of the Director. (Section 1508) The nonprofit

organization has 30 days from the mailing date of the Statement to pay the amount due. (Section 1508).

Although the employer may have a question concerning the Statement, it should pay the amount indicated so as not to incur interest

charges and then request a refund.

A nonprofit organization that fails to pay the amount due within these 30 days will be charged interest on the sum due at the rate of

2 percent for each month, computed at the rate of 12/365 of 2 percent per day. Payments received more than 30 days after such

payments became due shall be deemed to have been received on the last day of the month preceding the month in which they

became due.

All remedies available to the Director for collecting contributions due to the State are available for collection of reimbursement

payments. (Sections 2206 and 2207).

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M. Group Accounts

Two or more nonprofit organizations that have elected to reimburse benefits may file a joint application for the establishment of a

group account effective January 1 of any calendar year, for the purpose of sharing the cost of benefits paid on the basis of the wages

paid by such organizations. (Section 1404E)

The joint account must meet the following criteria:

1. The application must be filed prior to that January

2. The application must designate a group representative to act as the group’s agent for this purpose.

3. The group account must remain in effect for a minimum of two calendar years.

4. The group will be liable for reimbursement due from all of its members.

5. The amount due from any member of the group if a delinquency occurs with respect to any calendar quarter will be the same

ratio to the total amount due as the total wages for insured work paid by the member in the same calendar quarter bears to the

total wages for insured work paid in the quarter by all members of the group.

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G-39 (5/19)

X. FORMS AND REPORTS REQUIRED

All forms received from the Department of Employment Security should be read thoroughly and the instructions followed carefully.

Some forms are sent out by the Department solely for the information of the employing unit and require no further action.

Most forms, however, require prompt action if the employing unit is not to lose rights or incur penalties. IDES forms are self

explanatory or are accompanied by instructions.

If these instructions are not clear to you, contact the Employer Hot Line, (800) 247-4984, of the Department of Employment

Security in Chicago.

Commonly used forms can be obtained by downloading from the Department’s website at www.ides.illinois.gov.

Each report or form submitted to the Department of Employment Security must be signed and certified as to its accuracy and

contain the employer’s account number. The title of the individual signing the report or form must be shown on the report or form.

A. Form To Determine Liability For the Payment of Contributions

Every employing unit that has not paid contributions or has not filed a report of its employment experience must obtain Form REG-

UI-1 (Report to Determine Liability Under the Unemployment Insurance Act) from the Revenue Division of the Department of

Employment Security. This report must be completed and filed online using MyTax Illinois (mytax.illinois.gov) or by mail to:

Central Registration Division, Illinois Department of Revenue, PO BOX 19030 MAIL CODE 3-222, Springfield, IL 62794-9030 A

newly created employing unit must file this report within 30 days after it begins business. (56 Ill. Adm. Code 2760.105)

An employee leasing company which meets the requirements for reporting under its own account number the wages paid to workers

performing services for its clients must report each client to the Department of Employment Security within 30 days of the effective

date of the contract or by the end of the quarter in which the contract takes effect, whichever is later. If the report of the client

relationship is untimely, the report will go into effect with the next quarter for which the report may be considered timely. (56 Ill.

Adm. Code 2732.306).

Under Section 2600, any employing unit, including those not liable for the payment of contributions, which goes out of business, or

transfers or sells substantially all of its business assets or its business, or is involved in any change must submit Form UI-50A

(Notice of Change) to the Department of Employment Security within 10 days of such change. This report also must be filed if a

business sells a separate part of its business or the assets of such separate part. (56 Ill. Adm. Code 2760.110)

All employers determined to be liable for the payment of contributions, including nonprofit organizations and local governmental

entities that elect to reimburse benefits in lieu of paying contributions, must file Form UI-3/40 (Contribution and Wage Report)

quarterly.

B. Forms For Reporting Wages And Paying Contributions

The wages of the workers for a calendar quarter are reported on Contribution and Wage Report (Form UI-3/40). Before mailing the

UI-3/40 to the employer, the Department of Employment Security imprints on it the employer’s name, address, account number, its

employees’ names and social security numbers (from the prior quarter’s report) (up to twenty-five) and the rate at which

contributions are to be computed. The UI-3/40 should be completed and promptly returned with a check or money order covering

the contributions due.

The check should be made payable to

The Department of Employment Security

and mailed with the Report and Payment Coupon to the designated address. These forms should be mailed using the envelope

provided (56 Ill. Adm. Code 2760.135). Employers may also pay by Electronic Funds Transfer via MyTax Illinois. All monthly

reports MUST be made electronically.

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As an alternative to filing its wage and contribution report on paper, employers are encouraged to use a free service known as

MyTax Illinois. Information on this service can be found on the Department’s website at www.ides.illinois.gov. This service allows

an employer to reduce data entry time by automatically generating a list of employees from its previous report and merely updating

this information. It also calculates taxable wages automatically and is available any time day or night. This secure and confidential

service may also be used to obtain certain information about the employer’s account.

The Wage and Contribution Report (UI-3/40) must be filed by the use of electronic media which has been approved by the Director

if the employer reasonably expects to have 25 or more workers in its employ during that year or had 25 or more workers in its

employ during the previous year. Failure to comply with this requirement will result in penalties to the employer. Waiver of this

requirement is allowed only where the employer has been granted a waiver of the similar federal electronic reporting requirement.

Therefore, it is of utmost importance that employers subject to this rule take immediate action to insure compliance. (56 Ill. Adm.

Code 2760.140) If an employer is required to file its monthly and quarterly wage report electronically but instead files on

paper, the penalty for failing to properly file its monthly or quarterly report will still be imposed.

An employer that maintains its payroll records on data processing equipment and that is not subject to the requirement explained in

the previous paragraph, may submit its individual workers’ wages on electronic media. (56 Ill. Adm. Code 2760.140) Information

and detailed instructions for reporting may be obtained by writing to:

Illinois Department of Employment Security

Revenue Division

Attn: Document Control

33 South State Street

Chicago, IL 60603

In certain instances, employers engaged in more than one type of industry or operating in more than one geographical area within

the State of Illinois are required to submit Form BLS 3020 with the quarterly Form UI-3/40. On Form BLS 3020, the amount of

wages and the number of workers shown on Form BLS 3020 are broken down by type of industry or by geographical area.

An employer that continues to be liable for the payment of contributions but which has paid no wages in a calendar month or

quarter because of temporary inactivity must file a monthly or quarterly report showing “no wages paid”. If the employer terminates

business, it should file a final report showing the wages paid in the last quarter of business and should also file a Form UI-50A

(Notice of Change). (56 Ill. Adm. Code 2760.110)

C. Employer Records

All individuals or firms that employ one or more workers must maintain and preserve payroll records that show (56 III.

Adm. Code 2760.115):

1. Each worker’s name (including temporary and part-time workers).

2. Each worker’s social security account number.

3. The city or county in which each worker is employed.

4. The dates upon which each worker performed services.

5. The date on which each worker was hired, the date on which each worker was laid off, discharged or quit, and the date of

rehiring after temporary layoffs.

6. The monthly, weekly, daily or hourly rate of pay, or the piecework rate if the worker is paid on a piecework basis.

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7. The number of hours worked by each worker paid at an hourly or piecework rate.

8. The customary or scheduled full-time hours for each worker paid on an hourly or piecework basis in the employment in

which he is engaged.

9. The dates covered by the employer’s pay period, the wages paid each worker for each pay period and the total wages for each

pay period.

The record of wages paid must include:

1. Money wages paid, such as wages, salary and commissions.

2. Reasonable cash value of remuneration other than cash such as board, room, laundry, etc., except where a meal is provided for

the benefit of the employer. (56 Ill. Adm. Code 2730.100)

3. Special payments, such as bonuses, gifts, prizes, dismissal pay, vacation pay or pay in the nature of vacation pay, wages in lieu

of notice, and the period of time these special payments cover.

4. The amount of tips and gratuities, where these are customarily received by workers from persons other than the employer and are

reported to the employer by the worker.

All payroll records must be kept in such a way that quarterly wages of each worker and the weeks in which the workers performed

their services may be easily determined.

Payroll records are used to determine:

1. whether an employing unit is liable for the payment of contributions,

2. the total contributions an employer must pay, and

3. the benefit rights of unemployed or partially unemployed workers.

All records must be kept accurately and be up to date.

The records of employing units must be preserved for at least five years, or until a determination and assessment of contributions,

interest, or penalties or an action for the collection of contributions, interest or penalties has become final or is canceled and

withdrawn. (Section 1801)

Such records must be open to inspection by representatives of the Director of Employment Security at all reasonable times. Under

Section 1900, these records will be held confidential.

Willful failure to furnish reports, audits or other information required for the proper administration of the Illinois Unemployment

Insurance Act is punishable by fine and imprisonment. (Section 2800)

D. Notice Of Claim

As soon as possible after a claim is filed for benefits, a Notice of Claim to Last Employing Unit, or Notice of Claim to Chargeable

Employer or Notice of Claim to Interested Party is sent to the claimant’s most recent employing unit(s) and the Benefit chargeable

employer, the employer whose experience rating will be chargeable if benefits are paid to the individual. The same notice is sent

when an additional claim or a claim for Extended Benefits is first filed.

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An employer that receives the above Notice and which believes that the claimant may be ineligible for benefits for any reason, must

AT THAT TIME file a letter or a Notice of Possible Ineligibility (Form ADJ030F) (return copy) if it wishes to be a party to the

claims adjudicator’s determination. Unless the employer is a party to a determination, it does not have the right to appeal an adverse

determination. This Notice must be mailed to the office designated on the form, and by the designated “REPLY DUE DATE”

(within 10 days from the NOTICE OF CLAIM). As mentioned above, if the Notice is not sent by the employer within the time

period required, the employer loses its appeal rights except with regard to the issues of availability, disqualifying income, refusal of

work or “not unemployed” for subsequent weeks. (Section 702 and 56 Ill. Adm. Code 2720.130)

Pursuant to 56 III. Adm. Code 2720.132, if an employing unit discharges an individual for an alleged felony or theft connected with

his work, the employing unit must send a notification to:

Illinois Dept. of Employment Security

Attn: Felony and Theft Unit

33 South State St. – 9th Floor

Chicago, IL 60603

The notification must be sent within 10 days of the date that the individual files his next claim for benefits. This notice must meet

the sufficiency requirements of Section 602B of the Act. It is advisable that the employing unit mail this notice to the Department as

soon as possible after the separation of the individual from the employing unit.

E. Notice Of Possible Ineligibility Form ADJ030F (Return copy)

A Notice of Possible Ineligibility (Form ADJ030F) or a letter containing the equivalent information should be mailed or faxed to the

designated office within 10 days of the date of the notice of claim.

Failure to file a Notice within 10 days will result in a loss of party status and appeal rights. (Section 702 and 56 Ill. Adm. Code

2720.130)

Information contained on the Notice should include the names, addresses and telephone numbers of persons having personal

knowledge of the facts and circumstances supporting the allegations.

The Notice must also meet the sufficiency requirements of 56 Ill. Adm. Code 2720.130(c) as follows:

1. A separate Notice must be sent for each claimant.

2. The allegations must be supported by material reasons or facts, rather than conclusions of law. (Section 702)

3. If the employer alleges that the claimant is ineligible for benefits because of vacation pay, the employer must state the amount

paid and must also designate the period to which such pay is allocated. (Section 610 and 56 Ill. Adm. Code 2920.30)

4. If the employer alleges that the claimant is not eligible for benefits because of a labor dispute, the employer must provide the

Department with the name and social security number of each worker involved in the dispute within five days of the start of the

period of the work stoppage due to such labor dispute. (Section 604)

If the Department determines that the Notice has not met the sufficiency requirements, the Notice will be returned with a description

of the needed information.

If the requested information is mailed back within 10 days of the date the Department returned the Notice to the employer, the

Notice will be considered filed on the date that the Department originally received it. (56 Ill. Adm. Code 2720.130(e))

The Department will not return the Notice more than once. A determination that a Notice is insufficient may be appealed.

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It is of the utmost importance that each allegation on the Notice of Possible Ineligibility be supported by as detailed a statement of

the facts as possible. The claims adjudicator can make a correct determination only to the extent that the facts and circumstances

relevant to the claim are known to him. A mere allegation that a worker has been discharged for misconduct connected with the

work is inadequate. An allegation should be supported by a summary of the events which led to the worker’s discharge. Similarly,

an allegation that the worker is not available for work should be supported by a statement of the facts that led the employer to

believe that the worker is unavailable.

F. Claims Adjudicator’s Determination As to Eligibility

For each week for which a claim for benefits is made, a claims adjudicator makes a determination as to the claimant’s eligibility.

(Section 702 and 56 Ill. Adm. Code 2720.140)

An employer that has filed a sufficient Notice of Possible Ineligibility within the 10-day time limit is a party to such determination

and is entitled to a notice of the determination and has the right to appeal it. The General Assembly, with the approval of the

Governor, has allocated one million dollars to provide free legal assistance to “small employers” (less than 20 employees

during two of the four quarters preceding the request for free assistance) at Departmental hearings. To implement this

provision, the Department contracted with a private law firm to provide this assistance. A contact telephone number is

printed on determinations, decisions, etc., the appeals of which are covered by this program.

If no Notice of Possible Ineligibility or letter has been filed within the time limit, the employing unit is not a party to the

determination.

Even though an employer does not send a Notice within the proper time limit, the claims adjudicator will consider the information

disclosed on the late Notice in making his/her determination or in reconsidering a determination already made. An employer should

send a Notice if it believes the claimant to be ineligible, even though the 10-day period has expired. A late Notice does not make the

employer a party to the determination and cannot be made the basis of an appeal except with respect to the issues of availability,

disqualifying income, refusal of work or “not unemployed,” for subsequent weeks. However, the non-party employer will receive a

copy of the determination for its information only. (56 Ill. Adm. Code 2720.140)

An employer that has filed a sufficient and timely Notice of Possible Ineligibility alleging an issue of availability, disqualifying

income, refusal of work or “not unemployed” becomes a party to any determination made with respect to the week for which the

Notice is received. Such employer will have appeal rights to the determination.

Any employer that does not receive a Notice of Claim but which has knowledge of facts indicating the possible ineligibility of the

claimant may mail a Notice of Possible Ineligibility or a letter containing the information to Claimant Services, Department of

Employment Security or to the local office.

G. Report of Workers Affected By A Labor Dispute

An employer that wishes to contest a worker’s eligibility for benefits on the grounds that his unemployment is due to a stoppage of

work because of a labor dispute must mail or fax a Report of Workers Affected by Labor Dispute (Form ADJ027FE) or a letter

setting forth the names and social security numbers of the workers involved and the establishment affected by the labor dispute,

within five days after the worker’s unemployment begins to:

Illinois Department of Employment Security

UI Program Support

Labor Dispute & Determination Section

33 South State St.

Chicago, Illinois 60603

The report may be faxed to 312-793-6992.

Upon receipt of the employer’s list, a Labor Dispute Questionnaire (Form ADJ032FE) is sent to the employer and to either the

union or to the designated representative of the employees involved in the labor dispute.

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This questionnaire must be returned within 10 days or the adjudicator will issue his determination based on the information that is

included in the record at that time. Form ADJ027FE pertains only to possible ineligibility resulting from a labor dispute and does

not operate as a Notice of Possible Ineligibility with respect to any other issue. If any other issue exists, Form ADJ030F should be

used. (Section 604 and 56 Ill. Adm. Code 2720.130(d)(3))

H. Notice of Determination

If a sufficient and timely Notice of Possible Ineligibility (Form ADJ030F) is filed by an employer, the employer will be sent a

Notice of the Claims Adjudicator’s Determination (Form ADJ004L).

In the case of a labor dispute, if an employer files a timely Report of Workers Affected by Labor Dispute (Form ADJ027FE), the

employer will be sent a Notice of the Claims Adjudicator’s Determination accompanied by Form ADJ004L.

In either case, if the employer believes that the determination is not correct, it must file its appeal with the claims adjudicator at the

address provided therein within 30 days of the mailing date of the notice of the determination. If such an appeal is filed on time, a

hearing will be scheduled and the parties will be notified of the time and place of such hearing. The General Assembly, with the

approval of the Governor, has allocated one million dollars to provide free legal assistance to “small employers” (less than

20 employees during two of the four quarters preceding the request for free assistance) at Departmental hearings. To

implement this provision, the Department contracted with a private law firm to provide this assistance. A contact telephone

number is printed on determinations, decisions, etc., the appeals of which are covered by this program.

I. Back Pay Awards

The statute requires that, whenever an individual has received “wages” in the form of a back pay award, any unemployment

insurance benefits paid during the period covered by the back pay award must be repaid to the Department. To implement this

requirement, the employer MUST make the check for the ENTIRE back pay award payable jointly to the Director and the

individual. The employer should provide a copy of the settlement or back pay agreement. The Director will then deduct the amount

of unemployment insurance benefits previously paid and return the difference to the individual. There is no legal authority for the

employer to merely offset any unemployment insurance benefits from the back pay award. (Section 900D) However, the federal

court has held that the provision for withholding does not apply to awards made by the National Labor Relations Board.

Nonetheless such awards still constitute wages which still require the repayment by the claimant of any unemployment insurance

benefits paid during the period of the back pay award.

For revenue purposes, the employer must report the back pay award, and pay contributions or payments in lieu of contributions,

during the month or quarter in which the back pay award was paid to the employee.

For benefit purposes, a back pay award is allocated to the period covered by the back pay award. (56 Ill. Adm Code 2920.50)

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XI. CLAIMANT BENEFITS

The unemployment insurance program is an insurance system designed to protect workers against the risk of involuntary

unemployment. (Section 100) The benefits that a worker receives from the system partially replace the wages lost by him when he

experiences such unemployment. To receive these benefits, a worker must meet non monetary, as well as monetary, eligibility

requirements set forth in the Illinois Unemployment Insurance Act.

A claimant who has worked in Illinois but lives outside Illinois may apply for benefits under the Illinois Unemployment Insurance

Act by filing a claim in the state or territory in which he resides. He also has the option of filing his claim on line directly with

Illinois. (56 Ill. Adm. Code 2720.155)

A. Base Period Wages and Benefit Year

To be monetarily eligible for any benefits, a worker must have been paid wages of $1,600 or more in his base period by employers

subject to the UI Act. At least $440 of these wages must have been paid to him outside the calendar quarter in which he was paid

the highest amount of wages. (Section 500E)

In addition, to qualify for extended benefits an individual’s total base period earnings must be at least 1.5 times his high quarter

wages. (Section 409B)

A worker’s base period consists of the first four of the last five completed calendar quarters immediately preceding the month in

which the benefit year begins.

An alternative base period is available to workers who do not qualify for the maximum benefit amount because they were receiving

either workers’ compensation or occupational disability during the above base period.

Another alternative base period consisting of the last four completed calendar quarters immediately preceding the month in which

the benefit year begins is available where the worker is completely ineligible using the “standard” base period. (Section 237)

The benefit year is the one-year period beginning with the Sunday of the week in which the worker first files a valid claim for

benefits. (Section 242)

An individual who was paid benefits in his first benefit year is ineligible for benefits for any week in a second benefit year even if

he has sufficient base period wages unless, subsequent to the beginning of the immediately preceding benefit year, he performed

bona fide work and earned remuneration for such work equal to at least 3 times his current weekly benefit amount. (Section 607B)

B. Weekly Benefit Amount

The claimant’s weekly benefit amount depends on the amount of wages he was paid during the two highest quarters of his base

period by employers subject to the Act. (Section 401)

The total wages paid to an individual in the two highest quarters of his base period shall be divided by 26 to determine the Prior

Average Weekly Wage for the claimant. With respect to benefit years beginning on or after January 6, 2008, 47 percent of the

claimant’s Prior Average Weekly Wage equals his weekly benefit amount.

However, in no case can this amount be more than 47 percent of the Statewide Average Weekly Wage nor less than $51.

The Statewide Average Weekly Wage is computed twice per year for use in determining benefits under the Workers’ Compensation

Act.

However, a separate formula for unemployment insurance purposes was added to the statute in 1990. Using this formula, the

Statewide Average Weekly Wage for use in 2018is $972.73. (Section 401B)

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A claimant is given an additional benefit allowance for dependents. For a non-working spouse, an additional amount, determined by

statute, is added to the weekly benefit amount, not to exceed a maximum of the Statewide Average Weekly Wage set by statute.

For a dependent child or children, an additional amount set by statute is added to the weekly benefit amount, not to exceed a

maximum of the Statewide Average Weekly Wage also set by statute.

Except for benefit years beginning in 2012, most claimants are eligible to receive 26 times their weekly benefit amount during their

benefit year. Any dependents’ allowance payable to a claimant is in addition to the weekly benefit amount.

The total amount of benefits and dependents’ allowance payable to an eligible claimant cannot exceed the total amount of wages for

insured work paid to the claimant during his base period. (Section 403)

When a claims adjudicator makes a finding, determination, or a reconsideration of a finding or a determination that the claimant is

eligible for benefits, benefits are promptly paid on the basis of such determination, without regard to any appeal. Such payments

continue unless and until an appellate body decides that the claimant is ineligible for benefits. (Sections 703 and 706)

C. Disqualifying Income

An individual is ineligible for benefits for any week for which he receives disqualifying income in an amount equal to or greater

than his weekly benefit amount. If such disqualifying income is less than the claimant’s weekly benefit amount, he is entitled to

partial benefits if he is “unemployed” during that week. (Sections 239 and 402)

The following are examples of disqualifying income:

1. Wages from part time employment that are less than the claimant’s weekly benefit amount. With respect to any such week, the

claimant shall receive an amount equal to his weekly benefit amount, (plus dependents’ allowance) less that part of such wages

in excess of 50 percent of his weekly benefit amount. (Sections 239 and 402 and 56 Ill. Adm. Code 2920.15)

2. The entire amount of retirement pay from a former employer who has paid all of the cost of such retirement pay and 50 percent

of the retirement pay from a former employer who has paid some but not all of the cost of such retirement pay.

Social security benefits no longer constitute disqualifying income.

To be disqualifying income, the retirement pay must be paid by an individual or organization for which the individual provided

services in his base period or for an employer which is chargeable under Section 1502.1 for any benefits paid to the individual.

(Section 611)

3. Vacation pay, vacation pay allowance, or standby pay that an employer pays, becomes obligated or holds itself ready to pay

during an announced period of shutdown for inventory or vacation is wages for the portion of the shutdown period covered by

the payment. (56 Ill. Adm. Code 2920.25)

However, if the vacation pay is connected with a separation, the employer MUST file a Notice of Possible Ineligibility with the

Department within 10 days after the employer has been notified that the claimant has filed a claim, designate the period for

which the payment has been made and indicate the amount of vacation pay to be allocated. (Section 610 and 56 Ill. Adm. Code

2920.30)

4. Workers’ Compensation paid for temporary disability arising out of or in connection with the claimant’s employment under the

laws of Illinois, another state or of the United States. (Section 606)

5. Wages in lieu of notice are considered disqualifying income while severance pay is not. This distinction must be decided on an

individual, case-by-case, basis. (56 Ill. Adm. Code 2920.40)

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Employers with questions concerning these payments should contact the Claimant Assistance Hotline or:

Illinois Department of Employment Security

Office of Legal Counsel

33 South State Street

Chicago, Illinois 60603

D. Extended Benefits

During periods of abnormally high unemployment, extended benefits are payable to claimants who have exhausted the total amount

of regular benefits available to them and who meet the specific eligibility requirements pertaining to the extended benefit program.

If a claimant fails to accept or apply for suitable work or fails to engage in a systematic and sustained search for work, the claimant

will not be eligible for extended benefits unless he has been subsequently employed for four weeks and earned 4 times his weekly

benefit amount. (Section 409)

The weekly benefit amount for extended benefits is the same as the claimant’s weekly benefit amount established for his latest

regular benefit year. The total amount of extended benefits available to a claimant cannot exceed the lesser of 50 percent of the total

amount of his regular benefits or 13 times his weekly benefit amount.

However, an individual eligible for benefits in Illinois, but who is absent from this State and filing his claim from another state,

shall be eligible for a maximum of only two weeks of extended benefits unless an extended benefit period also exists in the other

state in which he files his claim.

The payment of extended benefits, which are financed on a 50/50 basis by the State’s employers and the federal government, is

triggered on in Illinois if the State insured unemployment rate (the ratio which the number of persons who claim regular benefits in

Illinois bears to all workers covered by the Illinois law) reaches a specified statutory figure.

The Director of Employment Security publicly announces the beginning and ending dates of any period during which extended

benefits are payable.

E. Claimant Non-Monetary Eligibility

When an unemployed worker files a claim for benefits, a claims adjudicator issues a Finding, which is a statement of the amount of

wages for insured work paid to the claimant during each quarter of his base period. This wage information usually is derived from

the employer’s quarterly report of wages (UI-40).

The claimant’s weekly benefit amount, the maximum amount of regular benefits payable to him for his benefit year and the

dependents’ allowance are computed. The claimant is notified of these amounts. (Section 701) Benefits are payable for

CALENDAR weeks (Sunday through Saturday). To be eligible for benefits for a week, the claimant must have been unemployed in

that week.

A claimant is unemployed in any week in which he is paid no wages and performs no services, or in any week of less than full time

work for which the wages payable to him are less than his weekly benefit amount.

An unemployed individual is eligible for benefits for a week only if:

1. He has registered for work and reports at regular intervals by mail or by telephone at an Illinois Department of Employment

Security office as required by the Director. (Section 500A and 56 Ill. Adm. Code 2865.125(a)(1))

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2. He has made a claim for benefits either on line or by phone. (Section 500B and 56 Ill. Adm. Code 2720.100)

3. During the week, he is able to work, available for work and actively seeking work. (Section 500C and 56 Ill. Adm. Code

2865.125)

An individual is presumed to be unavailable for work if:

a. After his separation from his most recent work, he has moved to and remains in a locality where job opportunities for

him are substantially less favorable than those in the locality he has left. (Section 500C3)

b. His principal occupation is that of a student in attendance at, or on vacation from, a public or private school.

However, an individual enrolled in and attending a Department approved training course may, under specified conditions,

be considered available for work. Such an individual will not be required to seek work and will not be disqualified under

Section 603 for work refusal. (Sections 500C4 and 5)

4. During the week, he has participated in reemployment services to which he has been referred, including but not limited to job

search assistance services.

5. He has served a non-compensable waiting period of one week in which he has met all the eligibility requirements. (Section

500D)

6. He is not disqualified under any of the disqualifying provisions of the Act.

A claimant may claim that he is exempt from registering with the employment service office for one of the following reasons

(56 Ill. Adm. Code 2865.100):

1. The claimant’s unemployment is due to a labor dispute even if the claimant is not involved in the dispute.

2. The claimant’s unemployment is due to a temporary layoff that does not exceed 10 weeks in duration.

3. The claimant is a member of a labor union whose hiring hall provides substantially all of the job placements. The hiring hall

must be certified by the Department. The procedures for union certification are found at 56 Ill. Adm. Code 2865.60.

4. The claimant is still attached to a regular job but he is only partially employed due to a temporary reduction in his hours.

5. The Department determines that, based on local labor market information, registration with the Illinois Employment Service

would not increase the likelihood of the claimant’s return to work.

A claimant is required, when requested, to keep and to provide the Department with records to indicate that he is conducting a

thorough, active and reasonable search for work. He should keep records of the names and addresses of employers contacted,

the dates and method of contact, the result of such contact, the type of work he has been seeking, and other relevant information

concerning the work search. (56 Ill. Adm. Code 2865.125)

The Department shall consider the following in evaluating the adequacy of an individual’s work search (56 III. Adm. Code

2865.125):

1. The individual’s physical and mental abilities.

2. The individual’s training and experience.

3. The employment opportunities in the area.

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4. The length of the claimant’s unemployment.

5. The nature and number of the claimant’s work search efforts.

6. The customary means of seeking employment in the occupation(s) in which the claimant seeks employment.

7. Any other information that would affect the claimant’s work search.

F. Voluntary Leaving Disqualification

An individual will be ineligible to receive benefits if he has left work voluntarily without good cause attributable to his employer.

The disqualification continues until the individual has become reemployed and has had earnings equal to or in excess of his current

weekly benefit amount in each of four calendar weeks which are either for services in employment, or have been or will be reported

pursuant to the provisions of FICA. (Section 601)

There are seven exceptions that exempt the worker from disqualification even though he has left work voluntarily without

good cause attributable to the employer:

1. When the worker is deemed physically unable to perform his work by a licensed and practicing physician, or where the worker

leaves work upon the advice of a licensed and practicing physician that assistance is necessary for the purpose of caring for his

spouse, child, or parent who is in poor physical health, and such assistance will not allow him to perform the usual and

customary duties of his employment.

In either instance, the worker must notify his employer of the reason for leaving before the exception will apply. (Section

601B1)

2. Where the worker has left work with one employer in order to accept bona fide work with another employer, and after such

acceptance, works for at least two weeks for the new employer, or earns wages equal to at least two times his current weekly

benefit amount. (Section 601B2)

3. Where a worker refuses to accept a transfer to other work offered by his employer under the terms of a collective bargaining

agreement, or established employer plan, when such transfer would result in the separation of another worker currently

performing this work. (Section 601B3)

4. Where the sole reason for leaving work was the sexual harassment of the worker, and the employer knew or should have known

of the harassment prior to the leaving and failed to take timely and appropriate action. (Section 601B4)

The Act defines sexual harassment as follows:

a. Unwelcome sexual advances, requests for sexual favors, sexually motivated physical contact or other conduct or

communication that is made a term or condition of the employment; or

b. The employee’s submission to or rejection of such conduct or communication that is the basis for decisions affecting

employment; and

c. When such conduct or communication has the purpose or effect of substantially interfering with an individual’s work

performance or creating an intimidating, hostile, or offensive working environment and the employer knows or should

know of the existence of the harassment and fails to take timely and appropriate actions to correct the problem.

5. Where the work accepted after the worker’s separation would be deemed unsuitable for him under the provisions of Section 603

of the Act. (Section 601B5) For further information concerning this exception see the discussion of Refusal of Work

Disqualifications.

GUIDE TO THE ILLINOIS U. I. ACT Part XI

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6. Where the worker leaves because he/she is a victim of domestic violence, has made a reasonable effort to preserve the

employment relationship and has provided the employing unit with written notice of this fact and has provided the Department

with certain documentation specified in the Act.

7. Where the worker leaves to accompany his/her spouse on a military reassignment or where the worker leaves to accompany his or

her spouse who has relocated because of a change in employment to a place where it is impractical to commute.

G. Misconduct Disqualification

An individual who is discharged for misconduct connected with his work is ineligible for benefits for the week in which he was

discharged for misconduct and thereafter until he has become re-employed and has had earnings equal to or in excess of his weekly

benefit amount in each of four calendar weeks.

These earnings must be for services in “employment” as defined in the Act, or must be for services in which the earnings have been

or will be reported under the Federal Insurance Contributions Act by the employing unit.

The Act defines “misconduct” as the “deliberate and willful violation of a reasonable rule or policy of the employing unit,

governing the individual’s behavior in performance of his work, provided such violation has harmed the employing unit or other

employees or has been repeated by the individual despite a warning or other explicit instruction from the employing unit.”

In addition, the following was added to 602A of the Act effective in 2016:

The previous definition notwithstanding, “misconduct” shall include any of the following work-related

circumstances:

1. Falsification of an employment application, or any other documentation provided to the employer, to

obtain employment through subterfuge.

2. Failure to maintain licenses, registrations, and certifications reasonably required by the employer, or

those that the individual is required to possess by law, to perform his or her regular job duties, unless the failure

is not within the control of the individual.

3. Knowing, repeated violation of the policies of the employer that are in compliance with State and federal

law following a written warning for an attendance violation, unless the individual can demonstrate that he or she

has made a reasonable effort to remedy the reason or reasons for the violations or that the reason or reasons for

the violations were out of the individual's control. Attendance policies of the employer shall be reasonable and

provided to the individual in writing, electronically, or via posting in the workplace.

4. Damaging the employer's property through conduct that is grossly negligent.

5. Refusal to obey an employer's reasonable and lawful instruction, unless the refusal is due to the lack of

ability, skills, or training for the individual required to obey the instruction or the instruction would result in an

unsafe act.

6. Consuming alcohol or illegal or non-prescribed prescription drugs, or using an impairing substance in an

off-label manner, on the employer's premises during working hours in violation of the employer's policies.

7. Reporting to work under the influence of alcohol, illegal or non-prescribed prescription drugs, or an

impairing substance used in an off-label manner in violation of the employer's policies, unless the individual is

compelled to report to work by the employer outside of scheduled and on-call working hours and informs the

employer that he or she is under the influence of alcohol, illegal or non-prescribed prescription drugs, or an

impairing substance used in an off-label manner in violation of the employer's policies.

8. Grossly negligent conduct endangering the safety of the individual or co-workers.

For purposes of paragraphs 4 and 8, conduct is "grossly negligent" when the individual is, or reasonably

should be, aware of a substantial risk that the conduct will result in the harm sought to be prevented and the

conduct constitutes a substantial deviation from the standard of care a reasonable person would exercise in the

situation.

Nothing in paragraph 6 or 7 prohibits the lawful use of over-the-counter drug products as defined in Section

206 of the Illinois Controlled Substances Act, provided that the medication does not affect the safe performance

of the employee's work duties.

Additionally, the requalification requirements of this subsection will be deemed to have been served if, subsequent to a discharge

for misconduct connected with his work, the worker is reinstated by the employer. (Section 602A)

GUIDE TO THE ILLINOIS U. I. ACT Part XI

G-51 (5/19)

H. Felony and Theft Disqualification

No benefit rights shall accrue to an individual based upon wages from any employer for services performed prior to the day upon

which the individual was discharged due to the commission of a felony or theft committed in connection with his work.

For this disqualification to apply, the employer must in no way be responsible for the felony and must have notified the Director of

such possible ineligibility within 10 days of the date of the individual’s next claim for benefits.

Furthermore, the individual must also have admitted his commission of the felony or theft to a representative of the Director or he

must have signed a written admission of such act and such written admission has been presented to the representative of the

Director, or such act has resulted in a conviction, or order of supervision by a court. (Section 602B)

I. Refusal of Work Disqualification

An individual will be ineligible for benefits if he has failed, without good cause, to do any of the following (Section 603):

1. To apply for available, suitable work when so directed by the Department of Employment Security office or the Director.

2. To accept suitable work when offered him by the Department of Employment Security office or an employing unit.

3. To return to his customary self employment (if any) when so directed by the Department of Employment Security office or the

Director.

This ineligibility shall commence in the week in which such failure occurred and, thereafter, until he has become reemployed and

has had earnings equal to or in excess of his current weekly benefit amount in each of four calendar weeks that are either for

services in employment or have been or will be reported for FICA purposes by each employing unit.

In determining whether or not any work is suitable for an individual, consideration shall be given to the degree of risk involved to

his health, safety, and morals, his physical fitness and prior training, his experience and prior earnings, his length of unemployment

and prospects for securing local work in his customary occupation, and the distance of the available work from his residence.

GUIDE TO THE ILLINOIS U. I. ACT Part XI

G-52 (5/19)

No work shall be deemed suitable and benefits shall not be denied to any otherwise eligible individual for refusing to accept

new work under any of the following conditions:

1. If the position offered is vacant due directly to a strike, lockout or other labor dispute;

2. If the wages, hours or other conditions of the work offered are substantially less favorable to the individual than those prevailing

for similar work in the locality;

3. If, as a condition of being employed, the individual would be required to join a company union or to resign from or refrain from

joining any bona fide labor organization;

4. If the position offered is a transfer to other work offered to the individual by the employing unit under the terms of a collective

bargaining agreement or pursuant to an established employer plan, program or policy, when the acceptance of such other work

by the individual would require the separation from that work of another individual currently performing it.

J. Labor Dispute Disqualification

An individual is ineligible for benefits for any week with respect to which it is found that his total or partial unemployment is due to

a stoppage of work that exists because of a labor dispute at the factory, establishment or other premises at which he is or was last

employed.

The term “labor dispute” does not include an individual’s refusal to work because of his employer’s failure to pay accrued earned

wages within 10 days from the date due. (Section 604)

Even though the individual’s unemployment is due to a stoppage of work, the individual may be eligible for benefits if he can show

that he is not directly interested in, nor participating in, nor helping to finance the labor dispute and does not belong to a grade or

class of workers so involved in the dispute.

A lockout by the employer is not, in itself, considered to be participation in the dispute by the worker and a worker’s failure to cross

a picket line shall not, in itself, be considered to be participation.

The term “labor dispute” does not include a lockout by an employer unless:

1. the workers’ representative refuses to meet with the employer under reasonable conditions to discuss the issues giving rise to the

lockout, or

2. there is a final adjudication by the National Labor Relations Board that the workers’ representative has failed to bargain in good

faith with the employer over the issues that gave rise to the lockout, or

3. the lockout is the direct consequence of the violation of the terms of an existing collective bargaining agreement by the workers’

representative.

A worker who was laid off in anticipation of a labor dispute will not be ineligible for benefits until the date of the actual stoppage of

work. (Section 604)

K. School Personnel Disqualification

An individual is ineligible for benefits on the basis of wages for services in employment in any capacity performed for a nonprofit

or public educational institution, including an institution of higher learning or educational service agency, for any week during a

holiday or vacation period.

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G-53 (5/19)

Educational personnel are also ineligible during a period between two successive academic years, or during a period between two

regular terms whether or not successive, or during a period of paid sabbatical leave provided for in the individual’s contract where

the individual performed service in the first of such academic years (or terms), and there is a contract or reasonable assurance that

the individual will perform service in any capacity for the same type of educational institution or educational service agency in the

second of such academic years (or terms). (Section 612 and 56 Ill. Adm. Code 2915.5 through 2915.35)

The term “educational service agency” means a governmental agency or governmental entity established and operated exclusively

for the purpose of providing such services to one or more educational institutions. (Section 612)

However, if an individual employed in a capacity other than instructional, research, or principal administrative by either an

educational institution or by an educational service agency in an educational institution is denied benefits and is not offered a bona

fide opportunity to provide service for the second year or term, he shall be entitled to a retroactive payment of benefits if he is

otherwise eligible. (Section 612)

Where an individual performs services in the employ of an educational institution or an educational service agency in one capacity

during an academic year or term, and there is a reasonable assurance that the individual will cross over to perform services in a

different capacity in the employ of any educational institution or any educational service agency for a subsequent academic year or

term, the individual is not ineligible for benefits during the period between the two academic years or terms.

L. Athlete Disqualification

If 90 percent of an individual’s total wages is for employment as a participant in sports or athletic events or training or preparing to

participate or as an ancillary participant, he will be ineligible for benefits for any week during the period between two successive

sport seasons (or similar periods).

However, the individual must have performed such services in the first of such seasons (or similar periods) and have a reasonable

assurance that he will perform such services in the subsequent season (or similar period). (Section 613 and 56 Ill. Adm. Code

2910.1)

For the purpose of this section, the following terms shall be defined as (56 III. Adm. Code 2910.5):

1. “Sport” or “athletics” is an activity involving an individual or group of individuals who participate in any competitive play, game

or contest that requires either physical or mental ability or both.

2. “Participate” shall mean taking part in sports or athletic events as an individual competitor or as a member of a team, or as

a participant in the training or preparing to so participate.

3. “Sports season” is that part of the calendar year when, according to the established practice or tradition of a particular sport or

game, the team players or individual competitors are actively involved in participating in sports or athletic events or in training

or preparing to so participate.

4. “Professional athlete” is a claimant whose occupation is participating in athletic or sporting events as:

a. A regular player or team member; or

b. An alternate player or team member; or

c. An individual in training to become a regular player or team member; or

d. An individual who, although performing no active services, is retained as a player or team member while recuperating from

illness or injury.

GUIDE TO THE ILLINOIS U. I. ACT Part XI

G-54 (5/19)

5. A semi-professional athlete is within the scope of the term “professional athlete” if he is paid for participating in sports or

athletic events.

6. “Ancillary personnel” is a claimant who, without being a professional athlete, participates, or trains or prepares to so participate

in sporting or athletic events. It includes coaches, trainers and referees.

A reasonable assurance that the claimant will perform services in sports or athletic events in a subsequent season is

presumed to exist if (56 III. Adm. Code 2910.10):

1. He has an expressed or implied multi-year contract that extends into the subsequent sport season; or

2. He is free to negotiate with other teams or employers for employment as a participant in the subsequent sport season, and

a. There is a reason to believe that one or more employers of participants in athletic events are considering or would be desirous

of employing the claimant in an athletic capacity in the subsequent sport season, and

b. He is not clearly and affirmatively withdrawn from participating in remunerative and competitive sports and athletic events.

When the “reasonable assurance” fails to materialize, the denial of benefits to the professional athlete or ancillary personnel is still

effective until the date when it is established that the assurance no longer exists. Following this date, benefits will be paid if the

individual is otherwise eligible. (56 Ill. Adm. Code 2910.15)

The beginning and ending dates of any sports season and the beginning and ending dates of the intervening time period between two

successive sports seasons shall be determined by the Director after taking into consideration factors of custom and practice within a

particular sport, published dates for beginning and ending a season and any other information bearing upon such determination. (56

Ill. Adm. Code 2905.15)

M. Alien Disqualification

An alien is ineligible for benefits for any week on the basis of services performed, unless at the time such services were

performed, the alien was:

1. lawfully admitted for permanent residence, or

2. otherwise permanently residing in the United States under color of law. (Section 614 and 56 Ill. Adm. Code 2905.1)

An alien is considered lawfully admitted for permanent residence in the United States if he is given the status of an immigrant.

However, Canadians and Mexicans who are allowed to enter the United States for daily or seasonal work shall likewise be

considered as lawfully admitted for permanent residence. (56 Ill. Adm. Code 2905.10)

An immigrant is an alien who has been accorded by the United States the privilege of entering the country for permanent residence

and of becoming a citizen of the United States under the conditions provided in the Immigration and Nationality Act. (56 Ill. Adm.

Code 2905.5)

An alien is defined as any person not a citizen or national of the United States as provided in Section 101 of the Immigration and

Nationality Act (8 U.S.C. 1101). (56 Ill. Adm. Code 2905.5)

GUIDE TO THE ILLINOIS U. I. ACT Part XI

G-55 (5/19)

An alien is considered permanently residing in the United States under color of law if his presence in this country is

presumptively legal because:

1. He has entered the United States prior to June 30, 1906; or

2. He has been admitted under an erroneous name or due to other error; or

3. He has been given “conditional entry” status by the United States Attorney General; or

4. He has been given parole into the United States by the United States Attorney General. (56 Illinois Administrative Code

2905.15)

A claimant who indicates in his claim for benefits that he is an alien must produce evidence that he is not ineligible for such

benefits. The presentation of a valid U.S. INS Form I 151, commonly known as the “green card,” or other similar documents issued

by the Immigration and Naturalization Service, will be sufficient for a finding that the alien is eligible under Section 614 of the Act.

(56 Ill. Adm. Code 2905.20)

N. Appeals And Hearings On Claimant Eligibility For Benefits

An employer or claimant who files a timely appeal from a finding or determination is entitled to and will receive a hearing. An

appeal to a finding or a determination is timely if it is filed within 30 days after the delivery or mailing of the finding or

determination. (Section 800). The General Assembly, with the approval of the Governor, has allocated one million dollars to

provide free legal assistance to “small employers” (less than 20 employees during two of the four quarters preceding the

request for free assistance) at Departmental hearings. To implement this provision, the Department contracted with a

private law firm to provide this assistance. A contact telephone number is printed on determinations, decisions, etc., the

appeals of which are covered by this program.

Such hearing, other than those involving labor dispute issues, is held by a Referee, also known as an Administrative Law Judge,

who is a civil service employee. Hearings arising from determinations involving labor dispute issues are heard by representatives

designated by the Director. (Sections 604 and 800)

At any hearing, the record of the claimant’s registration for work, or the claimant’s certification that he was able, available and

actively seeking work, or any documents submitted by the parties to the Department, shall be a part of the record, and shall be

competent evidence. (56 Ill. Adm. Code 2865.125, 2720.250 and 2720.265)

The failure of the claimant or other party to appear at a hearing, unless he is the appellant, shall not preclude

a decision in his favor if he is entitled to such decision on the basis of all the information in the record. (56 Ill. Adm. Code

2720.255(b))

A party may appeal an adverse Referee’s decision to the Board of Review. This appeal must be filed within 30 days from the date

the Referee’s decision is mailed. (Section 801 and 56 Ill. Adm. Code 2720.300) For more information on the appeal hearing

process, see the IDES pamphlet called “Preparing For Your Appeal Hearing” available at www.ides.illinois.gov.

A party may appeal a Board of Review decision or a decision of the Director made as the result of a hearing involving a labor

dispute to a court. Such appeals are heard by the Circuit Court serving the county in which the appellant resides or in which his

principal place of business is located.

The appellant must file the necessary legal documents with the Clerk of the Court within 35 days from the date of the decision of

the Board of Review or the Director is mailed. (Sections 801, 803 and 804)

GUIDE TO THE ILLINOIS U. I. ACT Part XII

G-56 (5/19)

XII. POLICING THE UNEMPLOYMENT INSURANCE PROGRAM

A. Benefit Payment Control

As a necessary adjunct to both collecting taxes and paying benefits, the Benefit Payment Control Division of the Department of

Employment Security monitors the unemployment insurance system to insure integrity and honesty by both employers and

claimants.

It accomplishes this goal by investigating liable employers to insure that no fictitious entities are being established; it verifies

changes of address by claimants; it audits requests for dependency allowances, reported return to work dates and work search

contacts; and, most importantly, it runs a quarterly crossmatch program.

This program is an audit device that matches the employer’s quarterly wage report against the Department’s claimant benefit

payment records for the same quarter. This crossmatch produces a listing of cases that may indicate possible fraud for follow up.

The Department then sends a Form SI 5 to the employers of the selected workers in order to obtain a breakdown of the workers’

wages on a weekly basis. This information is necessary because unemployment insurance benefit payments are made on a calendar

week (Sunday to Saturday) basis.

When an overpayment is determined, if fraudulent, the worker is subject to administrative penalties, in addition to being required to

repay the benefits received. Also, in many cases, the Office of the Attorney General seeks criminal sanctions, which might include

imprisonment.

B. Random Audit

Random Audit is another system designed to identify the types and cause of improper payment of unemployment insurance

benefits. This information is used by State and Federal program managers to modify payment procedures in order to better detect,

eliminate and prevent improper payments of unemployment insurance benefits.

Each week a sample of claims made by claimants receiving unemployment insurance payments is randomly selected for audit. Each

claimant whose claim has been selected is interviewed. His availability and search for work are checked and his employer’s wage

records are verified.

Based on the information obtained during this audit, the amount of benefits paid to the claimant is determined to be either proper or

improper. If paid improperly, the auditor will determine whether the claimant, the Department, or the employer caused the payment

to be improper. The reason for such improper payment will be documented. This information will be used to form a statistical

analysis and to compile management information on the types and causes of improper unemployment insurance benefit payments.

A Quality Control Team from the Department of Employment Security may visit employers to obtain information for this audit.

These Team members will present identification. Cooperation from employers can enhance the success of the Quality Control

program.

The purpose of the Quality Control Team visit is to verify the wage record of the claimant selected for audit, to verify that the

claimant made a reasonable effort to find work, and to verify the reason for the claimant’s separation or reduction in hours.

This information is needed because the right to collect benefits and the amount and duration of those benefits is based on previous

and, if any, current wages. Work search contacts with employers are verified because the claimant must be seeking work in order to

qualify for benefits.

The cause of separation or reduction in work hours may be needed to verify that the claimant became unemployed or was working

reduced hours through no fault of his own, which is a requirement for the receipt of benefits.

GUIDE TO THE ILLINOIS U. I. ACT Part XII

G-57 (5/19)

C. Field Audits

The Department of Employment Security maintains a field audit program to monitor the accuracy of the employer’s wage reports

and assist in the collection of employer contributions. An audit may result in the collection of additional contributions or, in some

cases, may result in a refund to the employer if it has overpaid its contributions.

During a field audit, a Department representative will visit the employer and examine the payroll records to verify the accuracy of

the wage reports filed with the Department or the accuracy of claimant information pertaining to the alleged receipt of wages.

By statute, the employer is required to maintain wage records for five years or until a determination and assessment of

contributions, interest, penalties or an action for the collection of contributions, interest or penalties has become final or is canceled

and withdrawn, and to allow a representative of the Director to examine these records.

An employer that has failed to report or pay contributions will be subject to the payment of interest and penalties for such non-

payment or non-reporting. (Sections 1401 and 1402)

In addition, the Attorney General may take court action to enforce a lien on the employer’s assets to collect the unpaid amounts.

(Section 2400)

Better detection and prevention of improper payment of benefits and non-payment of contributions will result in decreased

payments and increased contributions. Generally, this will directly decrease employer unemployment insurance contributions

required.

If you become aware of a suspected case of fraud, either by a claimant or employer, contact the Benefit Payment Control Division

of the Department at (312) 793-3200. The information you supply will be kept in confidence, but you must identify yourself.

D. Personal Liability of Officers or Employees

Any officer or employee of an employer who has the control, supervision, or responsibility of filing wage or contribution reports

and making payment of contributions or payments in lieu of contributions who willfully attempts to evade or defeat liability, shall

be personally liable for a penalty equal to the total amount due. The same process available to the Department of Revenue pursuant

to Section 3-7 of the Uniform Penalty and Interest Act shall be available to the Director and Department of Employment Security.

(Section 2405)

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G-58 (5/19)

XIII. THE DIRECTORY OF NEW HIRES

A. W

ho is Affected?

ll Illinois employers, including private firms, labor unions, nonprofit and religious organizations, and governmental entities are

required to comply with the requirements for the Directory of New Hires. (Section 1801.1)

hat is this Program?

he Directory of New Hires law requires employers (subject to withholding for federal income tax purposes) to report all new

employees within 20 calendar days of their start date, including full-time, part-time, temporary and recalled (persons who had been

off the payroll for 180 or more days) workers.

mployers must report the worker’s name, address and social security number along with the employer’s name, address and federal

employer identification number (FEIN). Employers are also required to report the worker’s starting date of employment. An

employer may also provide an address where income withholding orders for child support should be sent, if different from the

address already provided.

C. W

hy was it Enacted?

his program is part of the federal welfare reform legislation and is intended to assist child support officials to track down absentee

parents in order to collect child support payments. The information will also be used to reduce fraud and abuse of unemployment

insurance, food stamps, temporary welfare assistance and Medicaid.

D. H

ow does it Operate?

Employers have the option of submitting information via (a) the New Hires Reporting form provided by the Department of

Employment security; (b) copies of the employee’s W-4 form, with all information completed legibly, including the employer

information; (c) a separate listing of new employees, with required data; or (d) electronic or magnetic submission of data, reported

twice monthly. Reports may be sent via first class mail or facsimile transmission to the Department of Employment Security. Mail

data via first class:

llinois New Hire Directory

P.O. Box 19473

Springfield, IL 62794-9473

Fax data to:

1-217-557-194

4-hour, never-busy fax line)

. Where do I go for Information

For information on the file format for reporting via magnetic tape, cartridge or diskette, call

(312)

93-1137

or other questions, call

1-800-327-HIRE (4473)

r visit the IDES website at:

http://www.ides.illinois.gov

ILLINOIS UNEMPLOYMENT

INSURANCE LAW

HANDBOOK

ILLINOIS UNEMPLOYMENT INSURANCE ACT

820 ILCS 405/100-3200

EALTH CARE WORKER BACKGROUND CHECK ACT

225 ILCS 46/25, 40, 55, 60

EW HIRE REPORTING ACT

20 ILCS 1020/30, 40

his publication of the Unemployment Insurance Act and related statutes is not an “official” text and should not be cited as

an official or authoritative source. The official source of Illinois laws is the Illinois Compiled Statutes. The accuracy of any

specific provision in this publication cannot be assured, and readers of this publication are urged to consult the official

documents or contact legal counsel of their choice. Court decisions may affect the interpretation and constitutionality of

statutes. The Department of Employment Security disclaims any warranty, express or implied, as to the accuracy of this

version of the Unemployment Insurance Act and related statutes.

ILLINOIS U.I. ACT Table

A-i (01/23)

TABLE OF CONTENTS

THE UNEMPLOYMENT INSURANCE ACT ....................................................................................................................... 1

Sec. 100. Declaration of public policy. ......................................................................................................................................... 1

Sec. 200. Definitions. ................................................................................................................................................................... 1

Sec. 201. “Director” and “Department” defined. ........................................................................................................................ 1

Sec. 202. “Benefits” defined ........................................................................................................................................................ 1

Sec. 203. “Employment office” defined ....................................................................................................................................... 1

Sec. 204. “Employing unit” defined ............................................................................................................................................. 1

Sec. 205. “Employer” means: ...................................................................................................................................................... 2

Sec. 205.1. Indian tribe. ............................................................................................................................................................... 3

Sec. 206. “Employment” defined ................................................................................................................................................. 3

Sec. 206.1. Employment; employee leasing company. ............................................................................................................... 3

Sec. 207. Employment; services included .................................................................................................................................... 4

Sec. 208. Service deemed localized ............................................................................................................................................. 4

Sec. 208.1. Service performed by citizen outside United States; definitions .............................................................................. 5

Sec. 208.2. Service performed in any state or Canada where contributions not required; service directed or controlled in

Illinois ..................................................................................................................................................................... 5

Sec. 209. Service entirely without the State ................................................................................................................................ 5

Sec. 210. Services covered by arrangement whereby all services performed for employing unit are deemed performed

within State ............................................................................................................................................................ 5

Sec. 211. Service performed by officer or member of crew of American vessel ......................................................................... 6

Sec. 211.1. Service in employ of State or instrumentalities ........................................................................................................ 6

Sec. 211.2. Service in employ of nonprofit organization ............................................................................................................. 6

Sec. 211.3. Service not included for purposes of section 211.2 .................................................................................................. 6

Sec. 211.4. Service performed by individual in agricultural labor ............................................................................................... 7

Sec. 211.5. Domestic service ....................................................................................................................................................... 7

Sec. 212. Independent contractors .............................................................................................................................................. 7

Sec. 212.1. Truck Owner-Operator. ............................................................................................................................................. 8

Sec. 213. Employment by employing unit ................................................................................................................................... 8

Sec. 214. Agricultural labor not included; “farm” defined........................................................................................................... 9

Sec. 215. Domestic service not included ..................................................................................................................................... 9

Sec. 216. Services on or in connection with vessel or aircraft ..................................................................................................... 9

Sec. 217. Real estate salesmen; sellers of consumer products ................................................................................................. 10

Sec. 217.1. Real estate transaction closing agents .................................................................................................................... 10

Sec. 217.2. Real estate appraisers ............................................................................................................................................. 10

Sec. 218. Parent, child or spouse, service performed for .......................................................................................................... 10

Sec. 219. United States Government or another state, services performed for ....................................................................... 10

Sec. 220. State or subdivisions, service performed for.............................................................................................................. 11

Sec. 221. Religious, charitable, scientific, literary or educational corporations, services performed for ................................. 12

Sec. 222. Federal unemployment compensation system, service with respect to which unemployment compensation is

payable under....................................................................................................................................................... 12

Sec. 223. Services performed for organizations exempt from federal income tax ................................................................... 12

Sec. 224. Service for school, college or university by spouse of student .................................................................................. 12

Sec. 225. Services performed delivering newspapers or shopping news; performance of freelance editorial or photographic

work ...................................................................................................................................................................... 13

Sec. 226. Bets or wagers; selling of pools; lotteries; services in connection with ..................................................................... 13

Sec. 227. Services by full-time student in work experience program ........................................................................................ 14

Sec. 228. Insurance agent or solicitor on commission basis ...................................................................................................... 14

Sec. 229. Services deemed performed entirely outside State by reciprocal arrangement ....................................................... 14

Sec. 230. Services to hospital by patient, student nurse and intern not included .................................................................... 14

ILLINOIS U.I. ACT Table

A-ii (01/23)

Sec. 231. Services for employing unit subject to Act solely because of section 245 ................................................................. 14

Sec. 232. Employment, when director’s services not included ................................................................................................. 14

Sec. 232.1. Caddie ...................................................................................................................................................................... 15

Sec. 232.2. Students; organized camps ..................................................................................................................................... 15

Sec. 233. Services during one-half or more of pay period determines whether they are deemed employment ..................... 15

Sec. 234. “Wages” defined ........................................................................................................................................................ 15

Sec. 235. Wages not to include certain remuneration .............................................................................................................. 16

Sec. 236. “Insured work” defined .............................................................................................................................................. 18

Sec. 237. “Base period” defined ................................................................................................................................................ 18

Sec. 238. “Calendar quarter” defined ........................................................................................................................................ 18

Sec. 239. “Unemployed individual”. .......................................................................................................................................... 19

Sec. 240. “Contributions” defined ............................................................................................................................................. 19

Sec. 240.1. Fund Building Receipts ............................................................................................................................................ 19

Sec. 241. “Week” defined .......................................................................................................................................................... 19

Sec. 242. “Benefit year” defined ................................................................................................................................................ 19

Sec. 243. “Board of Review” defined ......................................................................................................................................... 19

Sec. 244. “State” defined ........................................................................................................................................................... 20

Sec. 245. Coordination with Federal Unemployment Tax Act ................................................................................................... 20

Sec. 246. “Institution of higher education” defined .................................................................................................................. 20

Sec. 247. “Hospital” defined ...................................................................................................................................................... 20

Sec. 300. Duration of coverage .................................................................................................................................................. 20

Sec. 301. Termination of coverage ............................................................................................................................................ 20

Sec. 302. Election of coverage ................................................................................................................................................... 21

Sec. 400. Payment of benefits ................................................................................................................................................... 22

Sec. 401. Weekly Benefit Amount - Dependents’ Allowances ................................................................................................... 22

Sec. 401.5. Exclusion of student aid. ......................................................................................................................................... 29

Sec. 402. Reduced weekly benefits............................................................................................................................................ 29

Sec. 403. Maximum total amount of benefits ........................................................................................................................... 29

Sec. 404. Payment of benefits due to deceased individuals ...................................................................................................... 30

Sec. 405. When wages payable treated as wages paid ............................................................................................................. 30

Sec. 406. Benefits after termination of military service ............................................................................................................ 30

Sec. 407. Part-time workers ....................................................................................................................................................... 30

Sec. 408.5. Additional Benefits .................................................................................................................................................. 31

Sec. 409. Extended Benefits....................................................................................................................................................... 33

Sec. 410. Health insurance deductions; regulations .................................................................................................................. 37

Sec. 500. Eligibility for benefits .................................................................................................................................................. 37

Sec. 500.1. Illinois Worker Adjustment and Retraining Notification Act; federal Worker Adjustment and Retraining

Notification Act. ................................................................................................................................................... 39

Sec. 501. Eligibility on basis of wages for previously uncovered services ................................................................................. 39

Sec. 502. Eligibility for benefits under the Short-Time Compensation Program. ...................................................................... 40

Sec. 600. Disqualifications ......................................................................................................................................................... 43

Sec. 601. Voluntary leaving ........................................................................................................................................................ 43

Sec. 602. Discharge for misconduct - Felony ............................................................................................................................. 44

Sec. 603. Refusal of work. .......................................................................................................................................................... 45

Sec. 604. Labor dispute .............................................................................................................................................................. 46

Sec. 605. Receipt of unemployment benefits under another law ............................................................................................. 46

Sec. 606. Receipt of Workers’ Compensation ............................................................................................................................ 46

Sec. 607. Ineligibility after 26 weeks - Work requirement for second benefit year .................................................................. 47

Sec. 609. Evasion of disqualifications ........................................................................................................................................ 47

Sec. 610. Vacation pay ............................................................................................................................................................... 47

Sec. 611. Retirement pay ........................................................................................................................................................... 48

Sec. 611.1. Social Security Retirement Pay Task Force. ............................................................................................................. 48

Sec. 612. Academic Personnel - Ineligibility between academic years or terms. ...................................................................... 49

ILLINOIS U.I. ACT Table

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Sec. 613. Athletes - ineligibility between sport seasons ............................................................................................................ 50

Sec. 614. Noncitizens - ineligibility............................................................................................................................................. 50

Sec. 700. Filing claims for benefits ............................................................................................................................................. 51

Sec. 701. Findings ...................................................................................................................................................................... 51

Sec. 702. Determinations ........................................................................................................................................................... 51

Sec. 703. Reconsideration of findings or determinations. ......................................................................................................... 52

Sec. 705. Effect of finality of finding of claims adjudicator, referee, or board of review – estoppel ........................................ 52

Sec. 706. Benefits undisputed or allowed - Prompt payment ................................................................................................... 52

Sec. 800. Appeals to referee or director .................................................................................................................................... 53

Sec. 801. Decision of referee or director ................................................................................................................................... 53

Sec. 802. Appointment of referees and providing legal services in disputed claims ................................................................. 53

Sec. 803. Board of review - Decisions ........................................................................................................................................ 54

Sec. 804. Conduct of hearings-Service of notice ........................................................................................................................ 54

Sec. 805. Additional parties ....................................................................................................................................................... 55

Sec. 806. Representation ........................................................................................................................................................... 55

Sec. 900. Recoupment ............................................................................................................................................................... 55

Sec. 901. Fraud - Repayment – Ineligibility ................................................................................................................................ 56

Sec. 901.1. Additional penalty ................................................................................................................................................... 56

Sec. 1000. Oaths- Certifications-Subpoenas .............................................................................................................................. 57

Sec. 1001. Testimony-Immunity ................................................................................................................................................ 57

Sec. 1002. Attendance of witnesses - Production of papers ..................................................................................................... 57

Sec. 1003. Depositions ............................................................................................................................................................... 57

Sec. 1004. Record of proceedings .............................................................................................................................................. 57

Sec. 1100. Review by the courts of decisions on benefits ......................................................................................................... 58

Sec. 1200. Compensation of attorneys ...................................................................................................................................... 58

Sec. 1300. Waiver or transfer of benefit rights - Partial exemption .......................................................................................... 58

Sec. 1400. Payment of contributions ......................................................................................................................................... 60

Sec. 1400.1. Solvency Adjustments ........................................................................................................................................... 61

Sec. 1400.2. Annual reporting and paying; household workers ................................................................................................ 62

Sec. 1401. Interest ..................................................................................................................................................................... 62

Sec. 1402. Penalties ................................................................................................................................................................... 63

Sec. 1402.1. Processing fee ........................................................................................................................................................ 64

Sec. 1403. Financing benefits paid to state employees ............................................................................................................. 64

Sec. 1404. Payments in lieu of contributions by nonprofit organizations ................................................................................. 65

Sec. 1405. Financing Benefits for Employees of Local Governments ........................................................................................ 68

Sec. 1405.1. Educational service centers; entities under joint agreements .............................................................................. 70

Sec. 1500. Rate of contribution ................................................................................................................................................. 70

Sec. 1501. Benefit wages ........................................................................................................................................................... 71

Sec. 1501.1. Benefit charges ...................................................................................................................................................... 72

Sec. 1502. Employer’s benefit wages ........................................................................................................................................ 72

Sec. 1502.1. Employer’s benefit charges ................................................................................................................................... 73

Sec. 1502.2. Benefit conversion factor ...................................................................................................................................... 74

Sec. 1502.3. Benefit charges; federal disasters ......................................................................................................................... 74

Sec. 1502.4. Benefit charges; COVID-19 .................................................................................................................................... 75

Sec. 1502.5. Benefit charges. ..................................................................................................................................................... 75

Sec. 1503. (Repealed) ................................................................................................................................................................ 75

Sec. 1503.1. Benefit ratio ........................................................................................................................................................... 75

Sec. 1504. State experience factor ............................................................................................................................................ 77

Sec. 1505. Adjustment of state experience factor ..................................................................................................................... 78

Sec. 1506.3. Fund building rates - Temporary Administrative Funding ..................................................................................... 82

Sec. 1506.4. (Repealed) ............................................................................................................................................................. 83

Sec. 1506.5. Surcharge; specified period ................................................................................................................................... 83

Sec. 1506.6. Surcharge; specified period ................................................................................................................................... 84

ILLINOIS U.I. ACT Table

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Sec. 1507. Contribution rates of successor and predecessor employing units ......................................................................... 84

Sec. 1507.1. Transfer of trade or business; contribution rate ................................................................................................... 85

Sec. 1508. Statement of benefit wages and statement of benefit charges ............................................................................... 87

Sec. 1508.1. Cancellation of Benefit Wages and Benefit Charges Due to Lack of Notice .......................................................... 87

Sec. 1509. Notice of employer’s contribution rate .................................................................................................................... 88

Sec. 1510. Service of notice ....................................................................................................................................................... 88

Sec. 1511. Study of experience rating ....................................................................................................................................... 88

Sec. 1511.1. Effects of 2004 Solvency Legislation ...................................................................................................................... 89

Sec. 1600. Agreement to contributions by employees void ...................................................................................................... 89

Sec. 1700. Duties and powers of Director ................................................................................................................................. 89

Sec. 1700.1. Study of legal services ........................................................................................................................................... 89

Sec. 1701. Rules and regulations ............................................................................................................................................... 89

Sec. 1701.1. Simplification of forms .......................................................................................................................................... 89

Sec. 1702. Personnel .................................................................................................................................................................. 89

Sec. 1703. Advisory councils ...................................................................................................................................................... 90

Sec. 1704. (Repealed) ................................................................................................................................................................ 90

Sec. 1704.1. (Repealed) ............................................................................................................................................................. 90

Sec. 1705. Employment offices; State employment service ...................................................................................................... 90

Sec. 1706. State- Federal cooperation ....................................................................................................................................... 90

Sec. 1800. Records and reports required of employing units - Inspection ................................................................................ 91

Sec. 1801. Destruction of records by employing units .............................................................................................................. 91

Sec. 1801.1. Directory of New Hires .......................................................................................................................................... 91

Sec. 1900. Disclosure of information ......................................................................................................................................... 92

Sec. 1900.1. Privileged Communications ................................................................................................................................... 96

Sec. 1900.2. (Repealed) ............................................................................................................................................................. 96

Sec. 2100. Handling of funds - Bond - Accounts ........................................................................................................................ 96

Sec. 2101. Special administrative account ................................................................................................................................. 98

Sec. 2101.1. Mandatory transfers.............................................................................................................................................. 99

Sec. 2102. Management of funds upon discontinuance of unemployment trust fund ........................................................... 101

Sec. 2103. Unemployment compensation administration and other workforce development costs ..................................... 101

Sec. 2103.1. (Repealed) ........................................................................................................................................................... 102

Sec. 2104. (Repealed) .............................................................................................................................................................. 102

Sec. 2105. (Repealed) .............................................................................................................................................................. 102

Sec. 2106.1. Master Bond Fund ............................................................................................................................................... 102

Sec. 2107. Special Programs Fund ........................................................................................................................................... 103

Sec. 2108. Title XII Interest Fund ............................................................................................................................................. 103

Sec. 2200. Determination and assessment of contributions by the director .......................................................................... 104

Sec. 2201. Refund or adjustment of contributions .................................................................................................................. 104

Sec. 2201.1. Interest on Overpaid Contributions, Penalties and Interest ............................................................................... 105

Sec. 2202. Finality of finding of claims adjudicator, Referee or Board of Review in proceedings before the director or his

representative .................................................................................................................................................... 105

Sec. 2203. Service of notice-Place of hearing-By whom conducted ........................................................................................ 105

Sec. 2204. Finality of director’s decision in absence of judicial review ................................................................................... 106

Sec. 2205. Judicial review of decisions on contributions ......................................................................................................... 106

Sec. 2206. Collection of amounts due ..................................................................................................................................... 106

Sec. 2206.1. Additional remedies; default in payment or contribution .................................................................................. 106

Sec. 2207. Limitations .............................................................................................................................................................. 107

Sec. 2208. Jurisdiction over resident and nonresident employing units ................................................................................. 107

Sec. 2208.1. Return receipts .................................................................................................................................................... 107

Sec. 2300. Conduct of hearings-Evidence ................................................................................................................................ 107

Sec. 2301. Testimony under oath ............................................................................................................................................ 107

Sec. 2302. Admissibility of certified copies .............................................................................................................................. 107

Sec. 2303. Decisions of Board of Review or Director prima facie correct ............................................................................... 108

ILLINOIS U.I. ACT Table

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Sec. 2304. Written reports of director’s employees as evidence ............................................................................................ 108

Sec. 2305. Presumption of validity of determination and assessment-Employing unit’s contribution reports prima facie

evidence ............................................................................................................................................................. 108

Sec. 2306. Certified copies of decisions or notices as evidence .............................................................................................. 108

Sec. 2400. Lien upon assets of employer-Commencement-Limitation ................................................................................... 108

Sec. 2401. Recording and release of lien ................................................................................................................................. 109

Sec. 2401.1. Lien registry ......................................................................................................................................................... 109

Sec. 2402. Priority of lien ......................................................................................................................................................... 110

Sec. 2403. Enforcement of lien ................................................................................................................................................ 110

Sec. 2404. Court may enjoin delinquent employing unit......................................................................................................... 111

Sec. 2405. Process; failure to file reports or make payments ................................................................................................. 111

Sec. 2500. Director not required to pay costs ......................................................................................................................... 111

Sec. 2600. Liability of certain other persons for payment of contributions incurred by delinquent employers..................... 112

Sec. 2700. Reciprocal arrangements........................................................................................................................................ 113

Sec. 2701. Authorization of financial transactions resulting from reciprocal arrangements .................................................. 113

Sec. 2702. Exchange of information, services and facilities-Equality of rights of nonresidents .............................................. 114

Sec. 2800. Violations and penalties ......................................................................................................................................... 114

Sec. 2900. Moneys and increments to be sole source of benefits-Non-priority of rights ....................................................... 115

Sec. 3000. Separability of provisions ....................................................................................................................................... 115

Sec. 3100. Saving clause .......................................................................................................................................................... 115

Sec. 3200. Title of act ............................................................................................................................................................... 115

Health Care Worker Background Check Act ..................................................................................................................... 116

Sec. 25. Hiring of people with criminal records by health care employers and long-term care facilities. .............................. 116

Sec. 40. Waiver ........................................................................................................................................................................ 118

Sec. 55. Immunity from liability ............................................................................................................................................... 118

Sec. 60. Offense ....................................................................................................................................................................... 118

New Hire Reporting Act ........................................................................................................................................................ 119

Sec. 30. Toll-free telephone line; public service announcements ........................................................................................... 119

Sec. 40. Emergency judicial hearing......................................................................................................................................... 119

ILLINOIS U.I. ACT Section 204

A-1 (01/23)

THE UNEMPLOYMENT INSURANCE ACT

(820 ILCS 405/100-3200)

Sec. 100. Declaration of public policy.

As a guide to the interpretation and application of this Act the public policy of the State is declared as follows: Economic

insecurity due to involuntary unemployment has become a serious menace to the health, safety, morals and welfare of the

people of the State of Illinois. Involuntary unemployment is, therefore, a subject of general interest and concern which

requires appropriate action by the legislature to prevent its spread and to lighten its burden which now so often falls with

crushing force upon the unemployed worker and his family. Poverty, distress and suffering have prevailed throughout the

State because funds have not been accumulated in times of plentiful opportunities for employment for the support of

unemployed workers and their families during periods of unemployment, and the taxpayers have been unfairly burdened with

the cost of supporting able-bodied workers who are unable to secure employment. Farmers and rural communities

particularly are unjustly burdened with increased taxation for the support of industrial workers at the very time when

agricultural incomes are reduced by lack of purchasing power in the urban markets. It is the considered judgment of the

General Assembly that in order to lessen the menace to the health, safety and morals of the people of Illinois, and to

encourage stabilization of employment, compulsory unemployment insurance upon a statewide scale providing for the setting

aside of reserves during periods of employment to be used to pay benefits during periods of unemployment, is necessary.

(Source: P.A. 79-98.)

Sec. 200. Definitions.

Unless the context indicates otherwise, the terms used in this Act have the meaning ascribed to them in Sections 201 to 247,

inclusive.

(Source: P.A. 77-1443.)

Sec. 201. “Director” and “Department” defined.

“Director” means the Director of the Department of Employment Security, and “Department” means the Department of

Employment Security.

(Source: P.A. 83-1503.)

Sec. 202. “Benefits” defined

“Benefits” means the money payments payable to an individual as provided in this Act, with respect to his unemployment.

(Source: Laws 1951, p. 32.)

Sec. 203. “Employment office” defined

“Employment office” means a free public employment office or branch thereof operated by this State or any other State as a

part of a State controlled system of public employment offices or by a Federal agency or any agency of a foreign government

charged with the administration of an unemployment compensation program or free public employment offices.

(Source: Laws 1951, p. 32.)

Sec. 204. “Employing unit” defined

“Employing unit” means any individual or type of organization, including the State of Illinois, each of its political

subdivisions and municipal corporations, and each instrumentality of any one or more of the foregoing; and any partnership,

association, trust, estate, joint-stock company, insurance company, or corporation, whether domestic or foreign, or the

receiver, trustee in bankruptcy, trustee or successor thereof, or the legal representative of a deceased person, which has or

subsequent to January 1, 1936, had in its employ one or more individuals performing services for it within this State. All

individuals performing services within this State for any employing unit which maintains two or more separate

establishments within this State shall be deemed to be employed by a single employing unit for all purposes of this Act.

A talent or modeling agency that is licensed under the Private Employment Agency Act is not the employing unit with

respect to the performance of services for which an individual has been referred by the agency.

(Source: P.A. 89-649, eff. 8-9-96.)

ILLINOIS U.I. ACT Section 205

A-2 (01/23)

Sec. 205. “Employer” means:

A. With respect to the years 1937, 1938, and 1939, any employing unit which has or had in employment eight or more

individuals on some portion of a day, but not necessarily simultaneously, and irrespective of whether the same

individuals are or were employed on each such day within each of twenty or more calendar weeks, whether or not

such weeks are or were consecutive, within either the current or preceding calendar year;

B. 1. With respect to the years 1940 through 1955, inclusive, any employing unit which has or had in employment

six or more individuals within each of twenty or more calendar weeks (but not necessarily simultaneously

and irrespective of whether the same individuals are or were employed in each such week), whether or not

such weeks are or were consecutive, within either the current or preceding calendar year;

2. With respect to the years 1956 through 1971, inclusive, any employing unit which has or had in employment

four or more individuals within each of twenty or more calendar weeks (but not necessarily simultaneously

and irrespective of whether the same individuals are or were employed in each such week), whether or not

such weeks are or were consecutive, within either the current or preceding calendar year;

3. With respect to the years 1972 and thereafter, except as provided in subsection K and in Section 301, any

employing unit which (1) pays or paid, for services in employment, wages of at least $1500 within any

calendar quarter in either the current or preceding calendar year; or (2) has or had in employment at least one

individual on some portion of a day, irrespective of whether the same individual is or was employed on each

such day, within each of twenty or more calendar weeks, whether or not such weeks are or were consecutive,

within either the current or preceding calendar year;

4. With respect to the years 1972 and thereafter, any nonprofit organization as defined in Section 211.2, except

as provided in subsection K and in Section 301;

5. With respect to the years 1972 and thereafter, the State of Illinois and each of its instrumentalities; and with

respect to the years 1978 and thereafter, each governmental entity referred to in clause (B) of Section 211.1,

except as provided in Section 301;

6. With respect to the years 1978 and thereafter, any employing unit for which service in agricultural labor is

performed in employment as defined in Section 211.4, except as provided in subsection K and in Section

301;

7. With respect to the years 1978 and thereafter, any employing unit for which domestic service is performed

in employment as defined in Section 211.5, except as provided in subsection K and in Section 301;

C. Any individual or employing unit which succeeded to the organization, trade, or business of another employing unit

which at the time of such succession was an employer, and any individual or employing unit which succeeded to the

organization, trade, or business of any distinct severable portion of another employing unit, which portion, if treated

as a separate employing unit, would have been, at the time of the succession, an employer under subsections A or B

of this Section;

D. Any individual or employing unit which succeeded to any of the assets of an employer or to any of the assets of a

distinct severable portion thereof, if such portion, when treated as a separate employing unit would be an employer

under subsections A or B of this Section, by any means whatever, otherwise than in the ordinary course of business,

unless and until it is proven in any proceeding where such issue is involved that all of the following exist:

1. The successor unit has not assumed a substantial amount of the predecessor unit’s obligations; and

2. The successor unit has not acquired a substantial amount of the predecessor unit’s good will; and

3. The successor unit has not continued or resumed a substantial part of the business of the predecessor unit in

the same establishment;

E. Any individual or employing unit which succeeded to the organization, trade, or business, or to any of the assets of a

predecessor unit (unless and until it is proven in any proceeding where such issue is involved that all the conditions

enumerated in subsection D of this Section exist), if the experience of the successor unit subsequent to such

succession plus the experience of the predecessor unit prior to such succession, both within the same calendar year,

would equal the experience necessary to constitute an employing unit an employer under subsections A or B of this

Section;

For the purposes of this subsection, the term “predecessor unit” shall include any distinct severable portion of an

employing unit.

F. With respect to the years 1937 through 1955, inclusive, any employing unit which together with one or more other

employing units is owned or controlled, directly or indirectly, by legally enforceable means or otherwise, by the

same interests, or which owns or controls one or more other employing units directly or indirectly, by legally

enforceable means or otherwise, and which if treated as a single unit with such other employing units or interests or

both would be an employer under subsections A or B of this Section;

ILLINOIS U.I. ACT Section 206.1

A-3 (01/23)

G. Any employing unit which, having become an employer under subsections A, B, C, D, E, or F of this Section, has

not, under Section 301, ceased to be an employer;

H. For the effective period of its election pursuant to Section 302, any other employing unit which has elected to

become fully subject to this Act;

I. Any employing unit which is an employer under Section 245;

J. Any employing unit which, having become an employer under Section 245, has not, with respect to the year 1960 or

thereafter, ceased to be an employer under Section 301; or

J-1. On and after December 21, 2000, any Indian tribe for which service in “employment” as defined under this Act is

performed.

K. In determining whether or not an employing unit for which service other than domestic service is also performed is

an employer under paragraphs 3, 4, or 6 of subsection B, the domestic service of an individual and the wages paid

therefor shall not be taken into account. In determining whether or not an employing unit for which service other

than agricultural labor is also performed is an employer under paragraphs 4 or 7 of subsection B, the service of an

individual in agricultural labor and the wages paid therefor shall not be taken into account. An employing unit which

is an employer under paragraph 6 of subsection B is an employer under paragraph 3 of subsection B.

(Source: P.A. 92-555, eff. 6-24-02.)

Sec. 205.1. Indian tribe.

“Indian tribe” has the meaning given to that term by Section 4(e) of the Indian Self-Determination and Education Assistance

Act (25 U.S.C. 450(e)), and includes any subdivision, subsidiary, or business enterprise wholly owned by such an Indian

tribe.

(Source: P.A. 92-555, eff. 6-24-02.)

Sec. 206. “Employment” defined

Subject to the provisions of Sections 207 to 233, inclusive, and of subsection B of Section 245, “employment” means any

service performed prior to July 1, 1940, which was employment as defined in this Act prior to that date, and any service after

June 30, 1940, performed by an individual for an employing unit, including service in interstate commerce and service on

land which is owned, held or possessed by the United States, and including all services performed by an officer of a business

corporation, without regard to whether such services are executive, managerial, or manual in nature, and without regard to

whether such officer is or is not a stockholder or a member of the board of directors of the corporation.

(Source: Laws 1951, p. 32.)

Sec. 206.1. Employment; employee leasing company.

A. For purposes of this Section:

1. “Client” means an individual or entity which has contracted with an employee leasing company to supply it

with or assume responsibility for personnel management of one or more workers to perform services on an on-

going basis rather than under a temporary help arrangement, as defined in Section 15 of the Employee Leasing

Company Act.

2. “Employee leasing company” means an individual or entity which contracts with a client to supply or assume

responsibility for personnel management of one or more workers to perform services for the client on an on-

going basis rather than under a temporary help arrangement, as defined in Section 15 of the Employee Leasing

Company Act.

B. Subject to subsection C, services performed by an individual under a contract between an employee leasing

company and client, including but not limited to services performed in the capacity of a corporate officer of the

client, are services in “employment” of the employee leasing company and are not services in “employment” of the

client if all of the following conditions are met:

1. The employee leasing company pays the individual for the services directly from its own accounts; and

2. The employee leasing company, exclusively or in conjunction with the client, retains the right to direct and

control the individual in the performance of the services; and

3. The employee leasing company, exclusively or in conjunction with the client, retains the right to hire and

terminate the individual; and

4. The employee leasing company reports each client in the manner the Director prescribes by regulation; and

ILLINOIS U.I. ACT Section 208

A-4 (01/23)

5. The employee leasing company has provided, and there remains in effect, such irrevocable indemnification, as

the Director may require by rule, to create a primary obligation on the part of the provider to the Illinois

Department of Employment Security for obligations of the employee leasing company accrued and final under

this Act. The rule may prescribe the form the indemnification shall take including, but not limited to, a surety

bond or an irrevocable standby letter of credit. The obligation required pursuant to the rule shall not exceed

$1,000,000.

C. Notwithstanding subsection B, services performed by an individual under a contract between an employee leasing

company and client, including but not limited to services performed in the capacity of a corporate officer of the

client, are services in “employment” of the client and are not services in “employment” of the employee leasing

company if:

1. The contribution rate, or, where applicable, the amended contribution rate, of the client is greater than the sum

of the fund building rate established for the year pursuant to Section 1506.3 of this Act plus the greater of 2.7%

or 2.7% times the adjusted state experience factor for the year; and

2. The contribution rate, or, where applicable, the amended contribution rate, of the employee leasing company is

less than the contribution rate, or, where applicable, the amended contribution rate of the client by more than

1.5% absolute.

D. Except as provided in this Section and notwithstanding any other provision of this Act to the contrary, services

performed by an individual under a contract between an employee leasing company and client, including but not

limited to services performed in the capacity of a corporate officer of the client, are services in “employment” of the

client and are not services in “employment” of the employee leasing company.

E. Nothing in this Section shall be construed or used to effect the existence of an employment relationship other than

for purposes of this Act.

(Source: P.A. 98-1133, eff. 12-23-14.)

Sec. 207. Employment; services included

The term “employment” shall include an individual’s entire service, within or both within and without this State, if

A. The service is localized in this State; or

B. The service is not localized in any State but some of the service is performed in this State and (1) the base of the

operations, or, if there is no base of operations, then, the place from which such service is directed or controlled is in

this State; or (2) the base of operations or place from which such service is directed or controlled is not in any State

in which some part of the service is performed but the individual’s residence is in this State; or

C. The service is not localized in any State but, after 1961, is performed by an individual employed on or in connection

with an American aircraft, if

1. The contract of service is entered into within this State, or

2. The contract of service is not entered into within this State or within any other State and, during the

performance of the contract of service and while the individual is employed on the aircraft, it touches at an air

field in this State; provided, however, that the Director may enter into arrangements with other States, pursuant

to Section 2700, with respect to such aircraft which touch at an air field in more than one State; Provided, that

the individual is employed on or in connection with such American aircraft when outside the United States. The

term “American aircraft” means an aircraft registered under the laws of the United States.

(Source: Laws 1961, p. 1784.)

Sec. 208. Service deemed localized

Service shall be deemed to be localized within a State if-

A. The service is performed entirely within such State; or

B. The service is performed both within and without such State, but the service performed without such State is

incidental to the individual’s service within the State.

(Source: Laws 1951, p. 32.)

ILLINOIS U.I. ACT Section 210

A-5 (01/23)

Sec. 208.1. Service performed by citizen outside United States; definitions

A. The term “employment” shall include the service of an individual who is a citizen of the United States, performed

outside the United States after December 31, 1971, (except in Canada, and in the case of the Virgin Islands after

December 31, 1971, and prior to January 1 of the year following the year in which the United States Secretary of

Labor approves the unemployment compensation law of the Virgin Islands under Section 3304(a) of the Internal

Revenue Code of 1954), in the employ of an American employer (other than service which is defined as

“employment” under the provisions of Sections 207 and 208 or the parallel provisions of the unemployment

compensation law of another State), if:

1. The employer’s principal place of business in the United States is located in this State; or

2. The employer has no place of business in the United States, but (a) the employer is an individual who is a

resident of this State; or (b) the employer is a corporation which is organized under the laws of this State; or (c)

the employer is a partnership or a trust and the number of partners or trustees who are residents of this State is

greater than the number who are residents of any one other State; or

3. None of the criteria of paragraphs 1 and 2 is met but the employer has elected coverage under this Act pursuant

to Section 302 or, the employer having failed to elect coverage under the unemployment compensation law of

any State, the individual has made a claim for benefits under this Act, based on wages for such service.

B. When used in this Section:

“American employer” means (1) an individual who is a resident of the United States; or (2) a partnership if two-

thirds or more of the partners are residents of the United States; or (3) a trust, if all of the trustees are residents of the

United States; or (4) a corporation organized under the laws of the United States or of any State.

“United States” includes the States of the United States of America, the District of Columbia, Puerto Rico, and the

Virgin Islands.

(Source: P.A. 80-2dSS-1.)

Sec. 208.2. Service performed in any state or Canada where contributions not required; service directed or controlled

in Illinois

Notwithstanding the provisions of Section 207, the term “employment” includes an individual’s service, whenever performed

within any State or Canada, if (A) contributions are not required with respect to any part of such service under an

unemployment compensation law of any other State or Canada, and (B) the place from which the service is directed or

controlled is in this State.

(Source: P.A. 77-1443.)

Sec. 209. Service entirely without the State

Services not covered under Section 207 and performed entirely without this State, with respect to no part of which

contributions are required and paid under an unemployment compensation law of any other State or of the Federal

Government, shall be deemed to be employment if the Director approves the election of the employing unit for whom such

services are performed that the entire service of such individual shall be deemed to be employment.

(Source: Laws 1951, p. 32.)

Sec. 210. Services covered by arrangement whereby all services performed for employing unit are deemed performed

within State

Services covered by an arrangement pursuant to Section 2700 between the Director and the agency charged with the

administration of any other State or Federal unemployment compensation law, or the unemployment compensation law of

Canada, pursuant to which all services performed by an individual for an employing unit are deemed to be performed entirely

within this State, shall be deemed to be employment.

(Source: P.A. 77-1443.)

ILLINOIS U.I. ACT Section 211.3

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Sec. 211. Service performed by officer or member of crew of American vessel

Notwithstanding any other provisions of this Act, the term “employment” shall include all service performed by an officer or

member of the crew of an American vessel on or in connection with such vessel, provided that the operating office, from

which the operations of such vessel operating on navigable waters within or within and without the United States are

ordinarily and regularly supervised, managed, directed and controlled, is within this State.

(Source: Laws 1951, p. 32.)

Sec. 211.1. Service in employ of State or instrumentalities

Except as provided in Section 220, the term “employment” shall include (A) service performed after December 31, 1971, by

an individual in the employ of this State or any of its instrumentalities (and by an individual in the employ of this State or any

of its instrumentalities and one or more other States or their instrumentalities for a hospital or institution of higher education

located in this State), provided that such service is excluded from the definition of “employment” in the Federal

Unemployment Tax Act solely by reason of Section 3306(c)(7) of that Act; (B) service performed after December 31, 1977

by an individual in the employ of this State or any of its instrumentalities, or any political subdivision or municipal

corporation thereof or any of their instrumentalities, or any instrumentality of more than one of the foregoing, or any

instrumentality of any of the foregoing and one or more other States or political subdivisions, provided that such service is

excluded from the definition of “employment” in the Federal Unemployment Tax Act by Section 3306(c)(7) of that Act; and

(Source: P.A. 92-555, eff. 6-24-02.)

Sec. 211.2. Service in employ of nonprofit organization

Except as provided in Section 211.3, the term “employment” shall include service performed after December 31, 1971, by an

individual in the employ of a nonprofit organization. As used in this Act, the term “nonprofit organization” means a religious,

charitable, educational, or other nonprofit organization defined in Section 501 (c) (3) of the Internal Revenue Code of 1986

which is exempt from income tax under Section 501 (a) of that Code, and which has or had in employment 4 or more

individuals within each of 20 or more calendar weeks (but not necessarily simultaneously and irrespective of whether the

same individuals are or were employed in each such week), whether or not such weeks are or were consecutive, within either

the current or preceding calendar year (or which has elected, pursuant to Section 302, to be an employer); provided, that

services performed for the organization are excluded from the definition of “employment” in the Federal Unemployment Tax

Act solely by reason of Section 3306 (c) (8) of that Act. An employing unit cannot be a nonprofit organization prior to 1972.

(Source: P.A. 86-3.)

Sec. 211.3. Service not included for purposes of section 211.2

For the purpose of Section 211.2, the term “employment” shall not include services performed

A. In the employ of (1) a church or convention or association of churches, or (2) an organization or school which is not

an institution of higher education, which is operated primarily for religious purposes and which is operated,

supervised, controlled or principally supported by a church or convention or association of churches;

B. By a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of

a religious order in the exercise of duties required by such order;

C. Prior to January 1, 1978, in the employ of a school which is not an institution of higher education;

D. In a facility conducted for the purpose of carrying out a program of rehabilitation for individuals whose earning

capacity is impaired by age or physical or mental deficiency or injury or providing remunerative work for

individuals who because of their impaired physical or mental capacity cannot be readily absorbed in the competitive

labor market, by an individual receiving such rehabilitation or remunerative work;

E. As part of an unemployment work-relief or work-training program assisted or financed in whole or in part by any

Federal agency or an agency of a State or political subdivision or municipal corporation thereof, by an individual

receiving such work-relief or work-training; or

F. After December 31, 1977, by an inmate of a custodial or penal institution.

(Source: P.A. 80-2dSS-1.)

ILLINOIS U.I. ACT Section 212

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Sec. 211.4. Service performed by individual in agricultural labor

A. Notwithstanding any other provision of this Act, the term “employment” shall include service performed after

December 31, 1977, by an individual in agricultural labor as defined in Section 214 when:

1. Such service is performed for an employing unit which (a) paid cash wages of $20,000 or more during any

calendar quarter in either the current or preceding calendar year to an individual or individuals employed in

agricultural labor (not taking into account service in agricultural labor performed before January 1, 1980, by a

noncitizen referred to in paragraph 2); or (b) employed in agricultural labor (not taking into account service in

agricultural labor performed before January 1, 1980, by a noncitizen referred to in paragraph 2) 10 or more

individuals within each of 20 or more calendar weeks (but not necessarily simultaneously and irrespective of

whether the same individuals are or were employed in each such week), whether or not such weeks are or were

consecutive, within either the current or preceding calendar year.

2. Such service is not performed in agricultural labor if performed before January 1, 1980 or on or after the

effective date of this amendatory Act of the 96th General Assembly, by an individual who is a noncitizen

admitted to the United States to perform service in agricultural labor pursuant to Sections 214(c) and

101(a)(15)(H) of the Immigration and Nationality Act.

B. For the purposes of this Section, any individual who is a member of a crew furnished by a crew leader to perform

service in agricultural labor for any other employing unit shall be treated as performing service in the employ of

such crew leader if (1) the leader holds a valid certificate of registration under the Farm Labor Contractor

Registration Act of 1963, or substantially all the members of such crew operate or maintain tractors, mechanized

harvesting or crop dusting equipment, or any other mechanized equipment, which is provided by the crew leader;

and (2) the service of such individual is not in employment for such other employing unit within the meaning of

subsections A and C of Section 212, and of Section 213.

C. For the purposes of this Section, any individual who is furnished by a crew leader to perform service in agricultural

labor for any other employing unit, and who is not treated as performing service in the employ of such crew leader

under subsection B, shall be treated as performing service in the employ of such other employing unit, and such

employing unit shall be treated as having paid cash wages to such individual in an amount equal to the amount of

cash wages paid to the individual by the crew leader (either on his own behalf or on behalf of such other employing

unit) for the service in agricultural labor performed for such other employing unit.

D. For the purposes of this Section, the term “crew leader” means an individual who (1) furnishes individuals to

perform service in agricultural labor for any other employing unit; (2) pays (either on his own behalf or on behalf of

such other employing unit) the individuals so furnished by him for the service in agricultural labor performed by

them; and (3) has not entered into a written agreement with such other employing unit under which an individual so

furnished by him is designated as performing services in the employ of such other employing unit.

(Source: P.A. 96-1208, eff. 1-1-11; 102-1030, eff. 5-27-22.)

Sec. 211.5. Domestic service

The term “employment” shall include domestic service after December 31, 1977, in a private home, local college club or

local chapter of a college fraternity or sorority performed for an employing unit which paid cash wages of $1,000 or more in

any calendar quarter in either the current or preceding calendar year to an individual or individuals employed in such

domestic service.

(Source: P.A. 80-2dSS-1.)

Sec. 212. Independent contractors

Service performed by an individual for an employing unit, whether or not such individual employs others in connection with

the performance of such services, shall be deemed to be employment unless and until it is proven in any proceeding where

such issue is involved that--

A. Such individual has been and will continue to be free from control or direction over the performance of such

services, both under his contract of service and in fact; and

B. Such service is either outside the usual course of the business for which such service is performed or that such

service is performed outside of all the places of business of the enterprise for which such service is performed; and

C. Such individual is engaged in an independently established trade, occupation, profession, or business.

(Source: Laws 1951, p. 32.)

ILLINOIS U.I. ACT Section 213

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Sec. 212.1. Truck Owner-Operator.

(a) The term “employment” shall not include services performed by an individual as an operator of a truck, truck-

tractor, or tractor, provided the person or entity to which the individual is contracted for service shows that the

individual:

(1) Is either:

(i) Registered or licensed as a motor carrier of real or personal property by the Illinois Commerce

Commission, the Interstate Commerce Commission, or any successor agencies, or

(ii) Operating the equipment under an owner-operator lease contract with the person or entity, when the person

or entity is registered, licensed, or both, as a motor carrier of real or personal property licensed by the

Illinois Commerce Commission, the Interstate Commerce Commission, or any successor agencies; and

(2) Has the right to terminate the lease contract and thereafter has the right to perform the same or similar services,

on whatever basis and whenever he or she chooses, for persons or entities other than the person or entity to

which the individual is contracted for services;

(3) Is not required by the person or entity to which the individual is contracted for services to perform services, or

be available to perform services, at specific times or according to a schedule or for a number of hours specified

by the person or entity, provided that pickup or delivery times specified by a shipper or receiver shall not be

deemed specified by the person or entity;

(4) Either leases the equipment or holds title to the equipment, provided that the individual or entity from which the

equipment is leased, or which holds any security or other interest in the equipment, is not:

(i) The person or entity to which the individual is contracted for service, or

(ii) Owned, controlled, or operated by or in common with, to any extent, whether directly or indirectly, the

person or entity to which the individual is contracted for services or a family member of a shareholder,

owner, or partner of the person or entity;

(5) Pays all costs of licensing and operating the equipment (except when federal or State law or regulation requires

the carrier to pay), and the costs are not separately reimbursed by any other individual or entity; and

(6) Maintains a separate business identity, offering or advertising his or her services to the public, by displaying its

name and address on the equipment or otherwise.

(b) Subsection (a) shall not apply:

(1) If, as a condition for retaining the individual’s services, the person or entity to which the individual is contracted

specifies the person or entity from which the equipment is to be leased or purchased; or

(2) To any services that are required to be covered as a condition of approval of this Act by the United States

Secretary of Labor under Section 3304(a)(6)(A) of the Federal Unemployment Tax Act.

relationship other than for purposes of this Act.

(d) For purposes of this Section:

(1) “Family member” means any parent, sibling, child, sibling of a parent, or any of the foregoing relations by

marriage.

(2) “Ownership”, “control”, or “operation” may be through any one or more natural persons or proxies, powers of

attorney, nominees, proprietorships, partnerships, associations, corporations, trusts, joint stock companies, or

other entities or devices, or any combination thereof.

(3) “Person or entity” means a sole proprietorship, partnership, association, corporation, or any other legal entity.

(Source: P.A. 89-252, eff. 8-8-95.)

Sec. 213. Employment by employing unit

Each individual performing services for, or assisting in performing the work of, any person in the employment of an

employing unit shall be deemed to be employed by such employing unit for all the purposes of this Act, whether such

services were procured or were paid for directly by such employing unit or by such person, provided the employing unit had

actual or constructive knowledge of the work.

(Source: Laws 1951, p. 32.)

ILLINOIS U.I. ACT Section 216

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Sec. 214. Agricultural labor not included; “farm” defined

The term “employment” does not include agricultural or aquacultural labor, except as provided in Section 211.4. With respect

to the period prior to January 1, 1972, the term “agricultural labor” means the services included within the term by this Act as

amended and in effect on September 15, 1969. On and after January 1, 1972, the term “agricultural labor” means all services

performed:

A. On a farm, in the employ of any person, in connection with cultivating the soil or in connection with raising or

harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training,

and management of live stock, bees, poultry, and fur-bearing animals and wildlife;

B. In the employ of the owner or tenant or other operator of a farm, in connection with the operation, management,

conservation, improvement, or maintenance of such farm and its tools and equipment;

C. In connection with the ginning of cotton, or the operation or maintenance of ditches, canals, reservoirs, or waterways

not owned or operated for profit, used exclusively for supplying and storing water for farming purposes;

D. In the employ of the operator of a farm, or of a group of operators of farms (or a cooperative organization of which

such operators are members), in handling, planting, drying, packing, packaging, processing, freezing, grading,

storing or delivering to storage or to market or to a carrier for transportation to market, in its unmanufactured state,

any agricultural or horticultural commodity; but only if such operator or operators produced more than one-half of

the commodity with respect to which such service is performed. The provisions of this subsection shall not be

deemed to be applicable with respect to service performed in connection with commercial canning or commercial

freezing or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for

distribution for consumption.

As used in this Section, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms,

plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of

agricultural or horticultural commodities, and orchards.

The term "aquacultural labor" means all services performed in connection with the production of aquatic products,

including any aquatic plants and animals or their by-products that are produced, grown, managed, harvested and

marketed on an annual, semi-annual, biennial or short-term basis, in permitted aquaculture facilities.

(Source: P.A. 102-555, eff. 1-1-22.)

Sec. 215. Domestic service not included

Except as provided in Section 211.5, the term “employment” shall not include domestic service in a private home, local

college club, or local chapter of a college fraternity or sorority.

(Source: P.A. 80-2dSS-1.)

Sec. 216. Services on or in connection with vessel or aircraft

A. The term “employment” shall not include service performed as an officer or member of a crew on or in connection

with a vessel which is not an American vessel; and service performed as an officer or member of a crew of an

American vessel on or in connection with such vessel, if the operating office, from which the operations of the

vessel operating on navigable waters within or within and without the United States are ordinarily and regularly

supervised, managed, directed and controlled, is without this State. The term “American vessel” means any vessel

documented or numbered under the laws of the United States; and includes any vessel which is neither documented

or numbered under the laws of the United States nor documented under the laws of any foreign country, if its crew is

employed solely by one or more citizens or residents of the United States or corporations organized under the laws

of the United States or of any State.

B. The term “employment” shall not include service performed by an individual on or in connection with an aircraft

which is not an American aircraft, if the individual is employed on or in connection with such aircraft when outside

the United States. The term “American aircraft” means an aircraft registered under the laws of the United States.

(Source: Laws 1961, p. 1784.)

ILLINOIS U.I. ACT Section 219

A-10 (01/23)

Sec. 217. Real estate salesmen; sellers of consumer products

(a) The term “employment” shall not include services performed as a real estate salesman to the extent that such

services are compensated for by commission.

(b) After December 31, 1986, the term “employment” shall not include services performed as a direct seller engaged in

the trade or business of selling, or soliciting the sale of, consumer products to any buyer on a buy-sell basis, a

deposit-commission basis, or any similar basis in the home or in an establishment other than a permanent retail

establishment, if:

(1) Substantially all the remuneration, whether or not paid in cash, for the performance of such services is directly

related to sales or other output, including the performance of services, rather than to the number of hours

worked; and

(2) The services performed by the person are performed pursuant to a written contract between such person and the

person for whom the services are performed, and such contract provides that the person will not be treated as an

employee with respect to such services for federal tax purposes.

(Source: P.A. 85-956.)

Sec. 217.1. Real estate transaction closing agents

(a) The term “employment” does not include services performed by an individual as a real estate transaction closing

agent when the individual has entered into a contract that specifies the relationship of the individual to the title

insurance company to be that of an independent contractor and not that of an employee and is compensated on a per

closing basis. For purposes of this Section, a “real estate transaction closing agent” is an individual assigned by a

title insurance company solely to ensure that the execution of documents related to the closing of a real estate sale or

the refinancing of a real estate loan and the disbursement of closing funds are in conformity with the instructions of

the entity financing the transaction, or in a cash transaction, to assure proper disbursement of funds as directed by

parties having an interest in the transaction.

(b) Subsection (a) shall not apply to any services that are required to be covered as a condition of approval of this Act

by the United States Secretary of Labor under Section 3304(a)(6)(A) of the Federal Unemployment Tax Act.

(Source: P.A. 89-649, eff. 8-9-96.)

Sec. 217.2. Real estate appraisers

(a) The term “employment” does not include services performed by an individual as a real estate appraiser under a

written independent contractor agreement if the agreement provides that:

(1) The individual shall be compensated on a fee per appraisal basis; and

(2) The individual is free to accept or reject appraisal requests made by the person for whom the services are being

performed, or the individual is not prohibited from contracting to perform those services for a person other than

the person for whom the services are being performed, or both.

(b) Subsection (a) shall not apply to any services that are required to be covered as a condition of approval of this Act

by the United States Secretary of Labor under Section 3304(a)(6)(A) of the Federal Unemployment Tax Act.

(Source: P.A. 89-649, eff. 8-9-96.)

Sec. 218. Parent, child or spouse, service performed for

The term “employment” shall not include service performed by an individual in the employ of his son, daughter, or spouse,

and service performed by a child under the age of 18 in the employ of his father or mother.

(Source: P.A. 79-817.)

Sec. 219. United States Government or another state, services performed for

The term “employment” shall not include service performed in the employ of any other State or its political subdivisions, or

of the United States Government, or of an instrumentality of any other State or States or their political subdivisions or of the

United States except that, in the event that the Congress of the United States shall permit States to require any

instrumentalities of the United States to make payments of contributions under a State Unemployment Compensation Act

(and to comply with State regulations thereunder), then, to the extent permitted by Congress, and from and after the date as of

which such permission becomes effective, all of the provisions of this Act shall be applicable to such instrumentalities and to

services performed for such instrumentalities in the same manner, to the same extent, and on the same terms as to all other

employers, employing units, individuals, and services; provided, that if this State shall not be certified for any year by the

Secretary of Labor of the United States of America or other appropriate Federal agency under Section 3304 of the Federal

Internal Revenue Code of 1954, then the payments required of such instrumentalities with respect to such year shall be

refunded by the Director in accordance with the provisions of Section 2201.

(Source: Laws 1955, p. 744.)

ILLINOIS U.I. ACT Section 220

A-11 (01/23)

Sec. 220. State or subdivisions, service performed for

A. The term “employment” shall not include service performed prior to 1972 in the employ of this State, or of any

political subdivision thereof, or of any wholly owned instrumentality of this State or its political subdivisions.

B. The term “employment” shall not include service, performed after 1971 and before 1978, in the employ of this State

or any of its instrumentalities:

1. In an elective position;

2. Of a professional or consulting nature, compensated on a per diem or retainer basis;

3. For a State prison or other State correctional institution, by an inmate of the prison or correctional institution;

4. As part of an unemployment work-relief or work-training program assisted or financed in whole or in part by

any Federal agency or an agency of this State, by an individual receiving such work-relief or work-training;

5. In a facility conducted for the purpose of carrying out a program of rehabilitation for individuals whose earning

capacity is impaired by age or physical or mental deficiency or injury or providing remunerative work for

individuals who because of their impaired physical or mental capacity cannot be readily absorbed in the

competitive labor market, by an individual receiving such rehabilitation or remunerative work;

6. Directly for the Illinois State Fair during its active duration (including the week immediately preceding and the

week immediately following the Fair);

7. Directly and solely in connection with an emergency, in fire-fighting, snow removal, flood control, control of

the effects of wind or flood, and the like, by an individual hired solely for the period of such emergency;

8. In the Illinois National Guard, directly and solely in connection with its summer training camps or during

emergencies, by an individual called to duty solely for such purposes.

C. Except as provided in Section 302, the term “employment” shall not include service performed in the employ of a

political subdivision or a municipal corporation, or an instrumentality of one or more of the foregoing or of this

State and one or more of the foregoing. This subsection shall not apply to service performed after December 31,

1977.

D. The term “employment” shall not include service performed after December 31, 1977:

1. In the employ of a governmental entity referred to in clause (B) of Section 211.1 if such service is performed in

the exercise of duties

a. As an elected official;

b. As a member of a legislative body, or a member of the judiciary, of this State or a political subdivision or

municipal corporation;

c. As a member of the Illinois National Guard or Air National Guard;

d. As a worker serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or similar

emergency;

e. In a position which, under or pursuant to the laws of this State, is designated as a major nontenured

policymaking or advisory position, or as a policymaking position the performance of the duties of which

ordinarily does not require more than 8 hours per week.

2. As part of an unemployment work-relief or work-training program assisted or financed in whole or in part by

any Federal agency or an agency of this State, or a political subdivision or municipal corporation, by an

individual receiving such work-relief or work-training.

3. In a facility conducted for the purpose of carrying out a program of rehabilitation for individuals whose earning

capacity is impaired by age or physical or mental deficiency or injury or providing remunerative work for

individuals who because of their impaired physical or mental capacity cannot be readily absorbed in the

competitive labor market, by an individual receiving such rehabilitation or remunerative work.

4. By an inmate of a custodial or penal institution.

E. The term “employment” shall not include service performed on or after January 1, 2002 in the employ of a

governmental entity referred to in clause (B) of Section 211.1 if the service is performed in the exercise of duties as

an election official or election worker and the amount of remuneration received by the individual during the calendar

year for service as an election official or election worker is less than $1,000.

F. The term “employment” shall not include service performed in the employ of an Indian tribe if such service is

performed in the exercise of duties:

1. as an elected official;

2. as a member of a legislative body, or a member of the judiciary, of that Indian tribe;

3. as a worker serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or similar emergency;

4. in a position which, under or pursuant to tribal law, is designated as a major nontenured policymaking or

advisory position, or as a policymaking position the performance of the duties of which ordinarily does not

require more than 8 hours per week;

ILLINOIS U.I. ACT Section 224

A-12 (01/23)

5. as part of an unemployment work-relief or work-training program assisted or financed in whole or in part by

any federal agency or an agency of this State, or a political subdivision or municipal corporation, or an Indian

tribe, by an individual receiving such work-relief or work training;

6. in a facility conducted for the purpose of carrying out a program of rehabilitation for individuals whose earning

capacity is impaired by age or physical or mental deficiency or injury or providing remunerative work for

individuals who because of their impaired physical or mental capacity cannot be readily absorbed in the

competitive labor market, by an individual receiving such rehabilitation or remunerative work;

7. by an inmate of a custodial or penal institution.

(Source: P.A. 92-441, eff. 1-1-02; 92-555, eff. 6-24-02.)

Sec. 221. Religious, charitable, scientific, literary or educational corporations, services performed for

The term “employment” does not include service performed in the employ of a corporation, community chest, fund, or

foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the

prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private

shareholder or individual, and no substantial part of the activities of which is carrying on propaganda or otherwise attempting

to influence legislation. On and after January 1, 1972, the provisions of this Section do not apply to services performed in the

employ of a nonprofit organization as defined in Section 211.2.

(Source: P.A. 77-1443.)

Sec. 222. Federal unemployment compensation system, service with respect to which unemployment compensation is

payable under

The term “employment” shall not include service with respect to which unemployment compensation is payable under an

unemployment compensation system established by an Act of Congress; provided that the Director is hereby authorized to

enter into agreements with the proper agencies under such Act of Congress, which shall become effective ten days after the

date of such agreement, to provide reciprocal treatment to individuals who have, after acquiring potential rights to benefits

under this Act, acquired rights to unemployment compensation under such Act of Congress or who have, after acquiring

potential rights to unemployment compensation under such Act of Congress, acquired rights to benefits under this Act.

(Source: Laws 1951, p. 32.)

Sec. 223. Services performed for organizations exempt from federal income tax

The term “employment” shall not include service performed in any calendar quarter in the employ of any organization

exempt from income tax under Section 501 (a) of the Federal Internal Revenue Code of 1954 (other than an organization

described in Section 401(a) of the Internal Revenue Code of 1954) or under Section 521 of the Internal Revenue Code of

1954 if the remuneration for such service is less than $50.

(Source: P.A. 77-1443.)

Sec. 224. Service for school, college or university by spouse of student

The term “employment” shall not include service performed in the employ of a school, college, or university, (A) by a

student who is enrolled and is regularly attending classes at such school, college or university, or (B) by the spouse of such

student if the spouse is advised, at the time the spouse commences to perform such service, that (1) the employment of the

spouse to perform such service is provided under a program to provide financial assistance to the student by the school,

college, or university, and (2) such employment will not be covered by any program of unemployment compensation.

(Source: P.A. 81-1130.)

ILLINOIS U.I. ACT Section 226

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Sec. 225. Services performed delivering newspapers or shopping news; performance of freelance editorial or

photographic work

This Section, and not Section 212 of this Act, controls the determination of employment status for services performed by

individuals in the delivery or distribution of newspapers or shopping news.

(A) The term “employment” shall not include services performed by an individual under the age of eighteen in the

delivery or distribution of newspapers or shopping news.

(B) The term “employment” does not include the performance of freelance editorial or photographic work for a

newspaper.

(B-5) The employment status of individuals engaged in the delivery of newspapers or shopping news shall be determined

as provided in this subsection. The term “employment” does not include the delivery or distribution of newspapers

or shopping news if at least one of the following 4 elements is present:

(1) The individual performing the services gains the profits and bears the losses of the services.

(2) The person or firm for whom the services are performed does not represent the individual as an employee to its

customers.

(3) The individual hires his or her own helpers or employees, without the need for approval from the person or firm

for whom the services are performed, and pays them without reimbursement from that person or firm.

(4) Once the individual leaves the premises of the person or firm for whom the services are performed or the

printing plant, the individual operates free from the direction and control of the person or firm, except as is

necessary for the person or firm to ensure quality control of the newspapers or shopping news, including, but

not limited to, the condition of the newspapers or shopping news upon delivery and the location and timing of

delivery of the newspapers or shopping news.

newspapers or shopping news to the ultimate consumer if:

(1) substantially all of the remuneration for the performance of the services is directly related to sales, “per piece”

fees, or other output, rather than to the number of hours worked; and

(2) the services are performed under a written contract between the individual and the person or firm for whom the

services are performed, and the contract provides that the individual will not be treated as an employee for

federal tax purposes.

(3) Delivery or distribution to the ultimate consumer does not include:

(i) delivery or distribution for sale or resale, including, but not limited to, distribution to a newsrack or

newsbox, salesperson, newsstand or retail establishment;

(ii) distribution for further distribution, regardless of subsequent sale or resale.

(D) Subsections (B-5) and (C) shall not apply in the case of any individual who provides delivery or distribution services

for a newspaper pursuant to the terms of a collective bargaining agreement and shall not be construed to alter or

amend the application or interpretation of any existing collective bargaining agreement. Further, subsections (B-5)

and (C) shall not be construed as evidence of the existence or non-existence of an employment relationship under

any other Sections of this Act or other existing laws.

(E) Subsections (B), (B-5), and (C) shall not apply to services that are required to be covered as a condition of approval

of this Act by the United States Secretary of Labor under Section 3304 (a)(6)(A) of the Federal Unemployment Tax

Act.

(Source: P.A. 98-1133, eff. 12-23-14.)

Sec. 226. Bets or wagers; selling of pools; lotteries; services in connection with

The term “employment” shall not include services performed in connection with the illegal recording or making of bets or

wagers or the selling of pools upon any contest or race; or in connection with the playing of or betting in any game of chance

involving the losing or winning of money or any other thing of value; or in connection with the illegal operation of any

lottery whether by dice, lot, numbers, game, hazard, or other gambling device.

(Source: Laws 1951, p. 32.)

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Sec. 227. Services by full-time student in work experience program

The term “employment” shall not include service performed after 1971 by an individual who is enrolled at a nonprofit or

public educational institution, which normally maintains a regular faculty and curriculum and normally has a regularly

organized body of students in attendance at the place where its educational activities are carried on, as a student in a full-time

program, taken for credit at such institution, which combines academic instruction with work experience, if such service is an

integral part of such program, and such institution has so certified to the employer, except that this Section shall not apply to

service performed in a program established for or on behalf of an employer or group of employers.

(Source: P.A. 83-71.)

Sec. 228. Insurance agent or solicitor on commission basis

The term “employment” shall not include services performed by an individual as an insurance agent or insurance solicitor, if

all such services performed by such individual are performed for remuneration solely by way of commission.

(Source: Laws 1951, p. 32.)

Sec. 229. Services deemed performed entirely outside State by reciprocal arrangement

The term “employment” shall not include services covered by an arrangement pursuant to Section 2700 whereby all services

performed by an individual for an employing unit are deemed to be performed entirely outside of this State.

(Source: Laws 1951, p. 32.)

Sec. 230. Services to hospital by patient, student nurse and intern not included

The term “employment” shall not include service performed after 1971:

(A) In the employ of a hospital, if such service is performed by a patient of the hospital.

(B) As a student nurse in the employ of a hospital or a nurses’ training school by an individual who is enrolled and

is regularly attending classes in a nurses’ training school approved pursuant to the Nurse Practice Act.

individual who has completed a 4 years’ course in a medical school chartered or approved pursuant to State law.

(Source: P.A. 95-639, eff. 10-5-07.)

Sec. 231. Services for employing unit subject to Act solely because of section 245

The term “employment” shall not include services performed for an employing unit which is subject to this Act solely

because of subsection A of Section 245, if and while such employing unit, with written approval of the Director, duly covers

under the unemployment compensation law of another State all services for it which would otherwise be covered under this

Act, provided that those individuals whose services are hereby excluded shall be counted in determining whether such

employing unit is an employer under Section 205. Such approval may be withdrawn by the Director upon written notice to

such employing unit, addressed to its last known address and, in the event of such withdrawal, such services shall again be

deemed employment subject to this Act as of the date such services ceased or could have ceased to be employment, by the

reasonably prompt filing of an application for termination of coverage, under the unemployment compensation law of such

other state.

(Source: Laws 1951, p. 32.)

Sec. 232. Employment, when director’s services not included

The term “employment” shall not include services performed by a director of a corporation while acting in the capacity of a

director on or for a committee provided for by law, or by charter or by by-laws of the corporation. This Section shall not

apply to the services described in Section 211.2.

(Source: P.A. 77-1443.)

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Sec. 232.1. Caddie

The term employment shall not include services performed by an individual under the age of 22 who is a full-time student

and acting as a caddie in assisting a golf player during a round of golf primarily by handling the player’s clubs when paid

directly by the club member or indirectly by the club acting as agent for the member.

(Source: P.A. 86-1015.)

Sec. 232.2. Students; organized camps

A. The term “employment” does not include service performed by a full-time student in the employ of an organized

camp if:

1. the camp:

(a) did not operate for more than 7 months in the calendar year and did not operate for more than 7 months in

the preceding calendar year; or

(b) had average gross receipts for any 6 months in the preceding calendar year which were not more than 33

1/3% of its average gross receipts for the other 6 months in the preceding calendar year; and

2. the full-time student performs services in the employ of the camp for less than 13 calendar weeks in the

calendar year.

B. For the purposes of this Section, an individual shall be treated as a full-time student for any period:

1. during which the individual is enrolled as a full-time student at an educational institution; or

2. which is between academic years or terms if:

(a) the individual was enrolled as a full-time student at an educational institution for the immediately preceding

academic year or term; and

(b) there is a reasonable assurance that the individual will be so enrolled for the immediately succeeding

academic year or term after the period described in clause (a) of this subdivision 2.

(Source: P.A. 92-433, eff. 1-1-02.)

Sec. 233. Services during one-half or more of pay period determines whether they are deemed employment

“Included and excluded services.” If the services performed during one-half or more of any pay period by an individual for an

employing unit constitute employment, all the services of such individual for such period shall be deemed to be employment;

but if the services performed during more than one-half of any such pay period by an individual for an employing unit do not

constitute employment, then none of the services of such individual for such period shall be deemed to be employment. As

used in this Section the term “pay period” means a period (of not more than thirty-one consecutive days) for which a payment

of remuneration is ordinarily made to an individual in the employ of an employing unit. This Section shall not be applicable

with respect to services performed in a pay period by an individual in the employ of an employing unit where any of such

service is excepted by Section 222.

(Source: Laws 1951, p. 32.)

Sec. 234. “Wages” defined

Subject to the provisions of Sections 235 and 245 C, “wages” means every form of remuneration for personal services,

including salaries, commissions, bonuses, and the reasonable money value of all remuneration in any medium other than

cash. The reasonable money value of remuneration in any medium other than cash shall be estimated and determined in

accordance with rules prescribed by the Director. Such rules shall be based upon the reasonable past experience of the

workers and the employing units concerned therewith.

Where gratuities are customarily received by an individual in the course of his work from persons other than his employer,

such gratuities shall, subject to the provisions of this paragraph, be treated as wages received from his employer. Each such

employer shall notify each such individual of his duty to report currently the amount of such gratuities to such employer and

the Director shall, by regulation, prescribe the manner of notification and of reporting. The amount of gratuities so reported

shall constitute a conclusive determination of the amount received unless the employer, within the time prescribed by

regulation, notifies the Director of his disagreement therewith. Gratuities not so reported to the employer in the manner

prescribed by such regulations of the Director shall not be wages for any of the purposes of this Act.

(Source: P.A. 84-1390.)

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Sec. 235. Wages not to include certain remuneration

(I)

If and only if funds from the State treasury are not appropriated on or before January 31, 2023 that are dedicated to pay

all outstanding advances made to the State's account in the Unemployment Trust Fund pursuant to Title XII of the

federal Social Security Act, then this Part (I) is inoperative retroactive to January 1, 2023.

The term "wages" does not include:

With respect to calendar years prior to calendar year 2023, the maximum amount includable as "wages" shall be

determined pursuant to this Section as in effect prior to the effective date of this amendatory Act of the 102nd

General Assembly.

With respect to the calendar year 2023, the term "wages" shall include only the remuneration paid to an

individual by an employer during that period with respect to employment which does not exceed $13,271.

With respect to the calendar year 2024, the term "wages" shall include only the remuneration paid to an

individual by an employer during that period with respect to employment which does not exceed $13,590.

With respect to the calendar year 2025, the term "wages" shall include only the remuneration paid to an

individual by an employer during that period with respect to employment which does not exceed $13,916.

With respect to the calendar year 2026, the term "wages" shall include only the remuneration paid to an

individual by an employer during that period with respect to employment which does not exceed $14,250.

With respect to the calendar year 2027, and each calendar year thereafter, the term "wages" shall include only

the remuneration paid to an individual by an employer during that period with respect to employment which does not

exceed $14,592.

The remuneration paid to an individual by an employer with respect to employment in another State or States,

upon which contributions were required of such employer under an unemployment compensation law of such other

State or States, shall be included as a part of the remuneration herein referred to. For the purposes of this subsection,

any employing unit which succeeds to the organization, trade, or business, or to substantially all of the assets of

another employing unit, or to the organization, trade, or business, or to substantially all of the assets of a distinct

severable portion of another employing unit, shall be treated as a single unit with its predecessor for the

calendar year in which such succession occurs; any employing unit which is owned or controlled by the same

interests which own or control another employing unit shall be treated as a single unit with the unit so owned or

controlled by such interests for any calendar year throughout which such ownership or control exists; and, with

respect to any trade or business transfer subject to subsection A of Section 1507.1, a transferee, as defined in

subsection G of Section 1507.1, shall be treated as a single unit with the transferor, as defined in subsection G of

Section 1507.1, for the calendar year in which the transfer occurs. This subsection applies only to Sections 1400,

1405A, and 1500.

A-1. (Blank).

The amount of any payment (including any amount paid by an employer for insurance or annuities, or into a fund, to

provide for any such payment), made to, or on behalf of, an individual or any of his dependents under a plan or

system established by an employer which makes provision generally for individuals performing services for him (or

for such individuals generally and their dependents) or for a class or classes of such individuals (or for a class or

classes of such individuals and their dependents), on account of (1) sickness or accident disability (except those

sickness or accident disability payments which would be includable as "wages" in Section 3306(b)(2)(A) of the

Federal Internal Revenue Code of 1954, in effect on January 1, 1985, such includable payments to be attributable in

such manner as provided by Section 3306(b) of the Federal Internal Revenue Code of 1954, in effect on January 1,

1985), or (2) medical or hospitalization expenses in connection with sickness or accident disability, or (3) death.

Any payment made to, or on behalf of, an employee or his beneficiary which would be excluded from "wages" by

subparagraph (A), (B), (C), (D), (E), (F) or (G), of Section 3306(b)(5) of the Federal Internal Revenue Code of

1954, in effect on January 1, 1985.

The amount of any payment on account of sickness or accident disability, or medical or hospitalization expenses in

connection with sickness or accident disability, made by an employer to, or on behalf of, an individual performing

services for him after the expiration of six calendar months following the last calendar month in which the

individual performed services for such employer.

Remuneration paid in any medium other than cash by an employing unit to an individual for service in agricultural

labor as defined in Section 214.

The amount of any supplemental payment made by an employer to an individual performing services for him, other

Public Act 102-1121, which became effective 1-23-2023, provided for such appropriation of funds.

ILLINOIS U.I. ACT Section 235

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than remuneration for services performed, under a shared work plan approved by the Director pursuant to Section

407.1.

(II) This Part (II) becomes operative if and only if funds from the State treasury are not appropriated on or before

January 31, 2023 that are dedicated to pay all outstanding advances made to the State's account in the Unemployment

Trust Fund pursuant to Title XII of the federal Social Security Act. If this Part (II) becomes operative, it is operative

retroactive to January 1, 2023.

The term "wages" does not include:

With respect to calendar years prior to calendar year 2004, the maximum amount includable as "wages" shall be

determined pursuant to this Section as in effect on January 1, 2006.

With respect to the calendar year 2004, the term "wages" shall include only the remuneration paid to an

individual by an employer during that period with respect to employment which does not exceed $9,800. With

respect to the calendar years 2005 through 2009, the term "wages" shall include only the remuneration paid to an

individual by an employer during that period with respect to employment which does not exceed the following

amounts: $10,500 with respect to the calendar year 2005; $11,000 with respect to the calendar year 2006; $11,500

with respect to the calendar year 2007; $12,000 with respect to the calendar year 2008; and $12,300 with respect to the

calendar year 2009.

With respect to the calendar years 2010, 2011, 2020, and each calendar year thereafter, the term "wages" shall

include only the remuneration paid to an individual by an employer during that period with respect to employment

which does not exceed the sum of the wage base adjustment applicable to that year pursuant to Section 1400.1, plus

the maximum amount includable as "wages" pursuant to this subsection with respect to the immediately preceding

calendar year. With respect to calendar year 2012, to offset the loss of revenue to the State's account in the

unemployment trust fund with respect to the first quarter of calendar year 2011 as a result of Section 1506.5 and the

changes made by this amendatory Act of the 97th General Assembly to Section 1506.3, the term "wages" shall

include only the remuneration paid to an individual by an employer during that period with respect to employment

which does not exceed $13,560. Except as otherwise provided in subsection A-1, with respect to calendar year 2013,

the term "wages" shall include only the remuneration paid to an individual by an employer during that period with

respect to employment which does not exceed $12,900. With respect to the calendar years 2014 through 2019, the

term "wages" shall include only the remuneration paid to an individual by an employer during that period with

respect to employment which does not exceed $12,960. Notwithstanding any provision to the contrary, the maximum

amount includable as "wages" pursuant to this Section shall not be less than $12,300 or greater than $12,960 with

respect to any calendar year after calendar year 2009 except calendar year 2012 and except as otherwise provided in

subsection A-1.

The remuneration paid to an individual by an employer with respect to employment in another State or States,

upon which contributions were required of such employer under an unemployment compensation law of such other

State or States, shall be included as a part of the remuneration herein referred to. For the purposes of this subsection,

any employing unit which succeeds to the organization, trade, or business, or to substantially all of the assets of

another employing unit, or to the organization, trade, or business, or to substantially all of the assets of a distinct

severable portion of another employing unit, shall be treated as a single unit with its predecessor for the calendar

year in which such succession occurs; any employing unit which is owned or controlled by the same interests which

own or control another employing unit shall be treated as a single unit with the unit so owned or controlled by such

interests for any calendar year throughout which such ownership or control exists; and, with respect to any trade or

business transfer subject to subsection A of Section 1507.1, a transferee, as defined in subsection G of Section

1507.1, shall be treated as a single unit with the transferor, as defined in subsection G of Section 1507.1, for the

calendar year in which the transfer occurs. This subsection applies only to Sections 1400, 1405A, and 1500.

A-1. If, by March 1, 2013, the payments attributable to the changes to subsection A by this or any subsequent

amendatory Act of the 97th General Assembly do not equal or exceed the loss to this State's account in the

unemployment trust fund as a result of Section 1506.5 and the changes made to Section 1506.3 by this or any

subsequent amendatory Act of the 97th General Assembly, including unrealized interest, then, with respect to

calendar year 2013, the term "wages" shall include only the remuneration paid to an individual by an employer

during that period with respect to employment which does not exceed $13,560.

The amount of any payment (including any amount paid by an employer for insurance or annuities, or into a fund, to

provide for any such payment), made to, or on behalf of, an individual or any of his dependents under a plan or

system established by an employer which makes provision generally for individuals performing services for him (or

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