People with a mental illness are among the most socially and economically marginalised members of the community. They experience high levels of unemployment and nonparticipation in the labour force. Unemployment has a number of negative effects including the loss of purpose, structure, roles and status and a sense of identity which employment brings. Employment enables social inclusion in the wider community and is an important way that people with a mental illness can meaningfully participate in the wider community. Australia has a mental health strategy, which guides the ongoing reform of mental health services. However, specific strategies to address the social and economic marginalisation of people with a mental illness have not been addressed. A recovery-oriented approach is recommended, which integrates the key sectors involved. To date there has been little intersectoral collaboration between the various sectors such as mental health services, housing, and vocational services. People require more role-specific assistance to enable them to participate in socially valued roles implicit with citizenship. There is a need to formulate improved pathways to assistance and more evidence-based forms of assistance to re-establish career pathways. This report aims to: 1) collect relevant overseas and Australian evidence about the employment of people with mental illness; 2) identify the potential benefits of employment; 3) describe patterns of labour force participation in Australia among people with mental illness; 4) identify how mental illness can cause barriers to employment; 5) outline the type of employment restrictions reported by people with mental illness; 6) identify the evidence-based ingredients of employment assistance; 7) identify relevant policy implications; and 8) suggest strategies to improve employment outcomes and career prospects for people with mental illness.