SPRINGFIELD – University administrators will no longer be able to exploit loopholes in the law by receiving massive payouts, or “golden parachutes,” after leaving their positions under a new law introduced by State Senator Laura Murphy (D-Des Plaines).

Lawmakers passed the Government Severance Pay Act in 2018 to limit the amount paid in university severance packages. Murphy’s measure strengthens the act by expanding the definition of severance pay and defining limits on compensation.

“I’m proud to see Illinois take a stand in defense of college students and families,” Murphy said. “The Government Severance Pay Act is a key part of making sure our colleges and universities put the campus community first.”

Universities typically offer severance packages to end an employment agreement without litigation or arbitration. Upon resignation, many public university administrators are awarded severance packages that pay amounts equal or nearly equal to their entire salary, even in cases of declining university performance under their leadership.

The new law expands the definition of severance pay to include employees who are transitioning to a new position within a unit of government. It also limits the compensation that employees may receive to the annual compensation of the highest paid employee in their department.

“This new law ensures tuition and tax dollars are benefitting students—not lining administrators’ pockets,” Murphy said.

The law, originally Senate Bill 2240, was signed into law Friday and takes effect immediately.