IL · Licensing Reference

Janitorial business licensing — Illinois

Last reviewed: June 2, 2026  |  Primary sources: Illinois Secretary of State; IL DOR; IL WCC; SBA.gov

Illinois imposes some of the most complex labor compliance obligations on commercial cleaning businesses of any U.S. state. Three statutes in particular define the operational risk landscape for building service contractors (BSCs): the One Day Rest in Seven Act (ODRISA), the Day and Temporary Labor Services Act (DTLSA), and the Chicago Fair Workweek Ordinance. In addition, Illinois adopted Public Act 102-0633 in 2022, bringing the state's independent contractor classification test closer to an ABC-test standard for certain purposes. Taken together, these laws require systematic documentation, scheduling discipline, and careful structuring of staffing agency relationships.

Illinois does not require a statewide specialty license for commercial cleaning services. Business registration is handled by the Illinois Secretary of State. LLC formation: $150 filing fee; annual report: $75. Corporations: $150 formation; $75 annual. Assumed business names (DBAs) require a Certificate of Assumed Name from the county clerk where the business operates. After entity formation, businesses must register for a Certificate of Registration with the Illinois Department of Revenue (IDOR) for sales tax (if applicable) and withholding purposes at mytax.illinois.gov.

One Day Rest in Seven Act (ODRISA): Rest and Meal Break Requirements

The One Day Rest in Seven Act (ODRISA), 820 ILCS 140/1 et seq., administered by the Illinois Department of Labor (IDOL), has two core requirements with significant implications for janitorial companies that schedule cleaners across multi-day commercial accounts:

• One-day rest: Every employer must allow every non-exempt employee at least 24 consecutive hours of rest within every consecutive 7-day period, in addition to the regular rest at the close of each working day. IDOL may grant permits for employees to work 7 consecutive days up to 8 times per year if employees consent and overtime is paid for hours over 40/week.
• Meal break: Employees working at least 7.5 continuous hours must receive at least 20 minutes for a meal period beginning no later than 5 hours after the start of the shift. For shifts exceeding 7.5 hours, an additional 20-minute meal break is required for each additional 4.5 hours worked. Employees must clock out and back in; breaks under 30 minutes must be paid if the employer cannot prove they were truly uninterrupted.

ODRISA penalties are assessed per incident: up to $500 per violation paid to the employee and an equal amount to the IDOL, with each missed rest day or missed meal break constituting a separate violation. For large BSCs, an IDOL audit that discovers systematic scheduling non-compliance can generate six-figure liability. Employers should require employees to document meal break waivers in writing and verify 7th-day consents are genuinely voluntary. IDOL contact: 160 N. LaSalle Street, Suite C-1300, Chicago, IL 60601; (312) 793-2804.

Day and Temporary Labor Services Act: Impact on BSC–Staffing Agency Relationships

The Day and Temporary Labor Services Act (DTLSA), 820 ILCS 175/1 et seq., regulates the relationship between day and temporary labor agencies, their workers, and the client employers (third-party companies) that use their workers. This statute has direct relevance for cleaning companies that either (a) operate as a staffing agency providing cleaning workers to other businesses, or (b) use a staffing agency to obtain cleaning workers.

Key 2023 amendments to the DTLSA (SB 2864, effective April 2023) significantly strengthened worker protections:

• After 90 days of assignment to the same client site, temp workers performing the same work as permanent employees must receive equal pay and equivalent benefits (or cash equivalent) as directly employed workers doing the same job
• Client employers (BSCs using temp staffing agencies) are jointly and severally liable with the staffing agency for DTLSA violations if the client knew or should have known of violations
• Day labor agencies must be licensed with IDOL and post a surety bond ($50,000 to $300,000 depending on number of workers placed); annual renewal fee is $3,000 per agency location, $750 per branch office

For a BSC operating in Chicago's dense commercial cleaning market that routinely uses temp agencies to staff accounts, the DTLSA equal-pay provision effectively requires that after 90 days, temp cleaners on those accounts receive compensation equivalent to direct-hire cleaners at the same facility. This creates significant operational cost pressure and incentivizes direct hiring of recurring workers.

Chicago Fair Workweek Ordinance

The Chicago Fair Workweek Ordinance (Chicago Municipal Code Chapter 6-110), effective July 1, 2020, applies to building services employers — explicitly defined to include janitorial services, building maintenance, and security services — that employ 100 or more employees globally (250 for nonprofits) and have at least 50 covered employees in Chicago. This makes the ordinance a critical compliance requirement for any mid-to-large BSC operating in Chicago.

Key requirements:

• Employers must provide workers with a written work schedule at least 14 days in advance of the first day of the schedule
• New employees must receive a written "good faith estimate" of their expected hours and schedule at hire
• Schedule changes with less than 14 days' notice trigger Predictability Pay: one hour of pay for added shifts; 50% of regular rate for hours subtracted from a shift with less than 24 hours' notice
• Employees may decline shifts starting within 10 hours of the end of a previous shift (the "right to rest"); if they work such shifts, pay at 1.25× regular rate
• Before offering additional hours to temp or seasonal workers, employers must first offer them to existing covered employees

Covered employees are those earning $50,000 or less per year (salaried) or $26 per hour or less (hourly) who spend the majority of their work time in Chicago in a covered industry. Penalties range from $300 to $500 per violation per day. The ordinance is enforced by the Chicago Department of Business Affairs and Consumer Protection (BACP). Large BSC clients with Chicago facilities almost universally require their cleaning vendors to certify compliance with the Fair Workweek Ordinance.

Independent Contractor Classification: P.A. 102-0633 and the Illinois ABC Test

Illinois Public Act 102-0633, signed into law August 27, 2021, and subsequently amended, significantly tightened worker classification standards. For purposes of the Illinois Wage Payment and Collection Act and state UI, Illinois applies a modified ABC test in which a worker is presumed to be an employee unless all three conditions are met:

• A: The worker is free from control both in contract and in fact
• B: The service is performed outside the usual course of the employer's business, or is performed entirely outside all places where the employer's business is conducted
• C: The worker is customarily engaged in an independently established trade or business of the same nature

For commercial cleaning companies, prong B is virtually impossible to satisfy: cleaning is the core business, and the work is performed at client sites that are effectively extensions of the BSC's operations. This means Illinois BSCs cannot legally classify their regular cleaning workers as 1099 independent contractors without substantial risk of IDOL audit, back-wage liability, and civil penalties. P.A. 102-0633 also imposes employee misclassification penalties of $1,500–$2,500 per misclassified employee per violation, plus debarment from state contracts for up to 180 days.

Workers' Compensation: Threshold and Administration

Illinois requires workers' compensation coverage for any employer with one or more employees, including part-time workers, under the Illinois Workers' Compensation Act (820 ILCS 305/1 et seq.). The Illinois Workers' Compensation Commission (IWCC) administers claims, hearings, and appeals. IWCC contact: 100 W. Randolph Street, Suite 8-200, Chicago, IL 60601; (312) 814-6611. Illinois uses NCCI classification codes. Commercial cleaning is rated under NCCI Class Code 9014.

Illinois maintains a competitive private WC insurance market; there is no state monopoly fund. Illinois has among the highest WC premium rates in the Midwest — employers in the cleaning sector should expect rates of approximately $3–$5 per $100 of payroll under code 9014, depending on claims history. BSCs with substantial Chicago operations should verify their policy includes adequate employer's liability limits given Illinois's liberal tort environment for WC claims.

Sales Tax on Cleaning Services

Illinois does not impose state sales tax on commercial cleaning services under the Illinois Retailers' Occupation Tax Act (35 ILCS 120). Janitorial and cleaning services are service transactions, not retail sales of tangible personal property, and are generally not taxable. However, cleaning supplies and equipment sold to customers are taxable at Illinois's combined rate (6.25% state + local taxes, typically reaching 10.25% in Chicago).

BSCs that sell cleaning products or supplies alongside their services (rather than merely using them as consumables) must register with IDOR for a Retailers' Occupation Tax account. The distinction between "using" supplies as part of a service (nontaxable) and "selling" supplies to the customer (taxable) turns on ownership and invoicing structure.

Chicago and Municipal Licensing

The City of Chicago requires all businesses operating within city limits to obtain a Chicago Business License from the Department of Business Affairs and Consumer Protection (BACP). For cleaning businesses, the applicable license type is a General Business License, available online at businesscertificates.chicago.gov. Fee: $250 for the initial two-year license; $125 renewal. Cleaning companies working in Chicago buildings also face site-specific compliance: a Certificate of Registration for each business location and adherence to Chicago's anti-wage-theft provisions (Municipal Code §1-24).

State Unemployment Insurance

Illinois UI is administered by the Illinois Department of Employment Security (IDES). New employers must register within 30 days of paying wages at ides.illinois.gov. New employer UI rate: 3.825% on the first $13,590 of wages per employee (2024 taxable wage base). Experienced employers are rated in a range of 0.85%–8.65%. Illinois also assesses a Fund Building Assessment of 0.55% on the first $12,960 of wages (adjusted annually). IDES actively investigates misclassification in the cleaning and building services industry.

Primary sources

Page last reviewed: June 2, 2026. Primary sources: Illinois Secretary of State; IL DOR; IL WCC; SBA.gov. Spot an error? Contact us.