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Arlington Heights business law attorneyWhen you own business that operates in a highly competitive industry, it is understandable that you would want to protect your investments, including your time, money, and efforts. If you rely on proprietary systems or recipes, you may require your employees to sign non-disclosure agreements which contractually forbids them from sharing your secrets. Similarly, if you employ a team of skilled employees, you may want to protect that investment as well by using non-compete agreements. According to the law in Illinois, non-competes may be an option, but only if your employees’ wages also represent how much you value your workers.

New Limitations

The Illinois Freedom to Work Act was signed by Governor Bruce Rauner last August and went into effect on January 1, 2017. The Act prohibits the use of non-compete agreements for employees who make less than $13 per hour. The measure was prompted, in large part, by complaints from employees of the sandwich chain Jimmy Johns. Workers at the Illinois-based chain were routinely required to sign non-compete agreements that prevented them from working for another sub shop during their employment with Jimmy Johns—and two more years after that!

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Illinois business law attorneyIn recent months, at least seven states—including Illinois—have been vying for the attention of Foxconn, a Taiwan-based technology company looking for a new foothold on American soil. Illinois lawmakers and industry leaders believed that landing a Foxconn plant could have been a major boost to the state’s economy and would have created thousands of new jobs.

This week, however, an announcement by Foxconn dashed the hopes of Illinoisans by confirming that it plans to build a 20-million square foot facility in Wisconsin. The new plant will produce LCD panel screens and is expected to employ 3,000 workers when it opens. The company also said that its Wisconsin plant could eventually employ as many as 13,000 as it continues to invest in the region.

A Questionable History

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Posted on in Business Law

non-compete clauses, low-wage employee, non-compete agreements, nondisclosure agreement, Arlington Heights business law attorneysOn August 19, 2016, Illinois state Governor Bruce Rauner signed a bill into law referred to as the Illinois Freedom to Work Act. The law took effect on January 1, 2017—a law which will notably impact the private business sector.

Is a Non-Compete Clause Enforceable?

It is common for private business owners to require their employees sign and adhere to non-compete agreements. However, the Illinois Freedom to Work Act specifically prohibits a business owner from entering into a contract that denies a low-wage employee the ability to find employment elsewhere that competes with his or her current company.

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Arlington Heights employment law attorneys, employment at willIllinois is an employment at will state. That means employers do not have to provide a reason for termination to their employees. However, there are important limitations and exclusions that employers should know about before they terminate an employee. The following information explains the laws and provisions, and where employers can find help with ensuring they are compliant with Illinois state law.

Discrimination and Termination

Employers cannot terminate an employee for reasons related to race, color, marital status, physical or mental disability, gender, religion, ancestry, citizenship status, national origin, age, or military status. So, although they do not need an official reason to terminate an employee, it is usually preferred that employers do have documentation to back up their reason. This can provide protection in the event of a discrimination lawsuit.

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Arlington Heights employment law attorneys, tax withholding, record-keeping lawsWhen business is booming and you know you need to hire someone to fill the gap, it is easy to get excited. However, you cannot let that excitement cloud your judgment. There are critical employment law specifics you need to know before hiring your first employee. Some of the most critical relate to tax withholding and record-keeping requirements.

Preparing for the Hiring Phase

Before you can hire an employee, you must first obtain an employer identification number (EIN). This number is used for tax reporting purposes, and it is required for submitting certain documents to the Internal Revenue Service (IRS). You also need it to report information about your employees to the state. In addition, keep in mind that you will need to keep records of employment, tax withholding, deductible expenses, and other financial and employment-related information for a minimum of four years.

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