Client Alert: New or Amended Illinois Employment Laws for 2026

Illinois continues to enact sweeping legislation that expands employee protections, enhances workplace transparency, and increases employer compliance obligations. Many of these recently- passed changes will take effect over the next year, with most of them beginning January 1, 2026. Below is a summary of the most impactful changes.

Family Neonatal Intensive Care Leave Act

This new law creates job-protected leave entitlement for employees with newborns requiring NICU care. Employees will be entitled to: 10 days of unpaid leave if the employer has 16–50 employees or 20 days of unpaid leave if the employer has 50 or more employees.

Employees must exhaust any available FMLA leave prior to using this leave, and are protected from any retaliation for asserting their rights under the new law. Leave can be taken intermittently or continuously, though employers may require that leave be taken in increments of no less than 2 hours. Notably, unlike FMLA, employers cannot require employees to exhaust paid time off prior to taking leave under this new statute.

Amendments to Illinois’ Workplace Transparency Act (Employment, Severance, and Confidentiality Agreements)

HB 3638 (Public Act 104-0320) amends the Illinois Workplace Transparency Act. While the law previously stated that no contract or agreement could restrict an employee from reporting unlawful employment practices, it has now been expanded to prohibit contracts or agreements restricting employees from “engaging in concerted activity to address work-related issues.” The definition of “unlawful employment practice” was also amended from “unlawful discrimination, harassment, or retaliation” actionable under certain laws, to “any practice made unlawful” by the Illinois Human Rights Act, Title VII of the Civil Rights Act of 1964, and other state and federal laws governing employment.

Additionally, employment agreements that purport to shorten any applicable statute of limitation, apply non-Illinois law to an Illinois employee’s claim, or require adjudication of an employee’s claim in a venue outside of Illinois are now against public policy, void, and severable from an otherwise enforceable contract. The amendments also clarify that as part of a separation or settlement agreement, any valid, bargained-for consideration in exchange for confidentiality related to unlawful employment practices must be separate from any consideration provided in exchange for a release of claims. And, while confidentiality related to unlawful employment practices must be “the documented preference of the employee” in order to be included as part of a separation or settlement agreement, employers are now prohibited from unilaterally including any clause in the agreement that states the promises of confidentiality are the preference of the employee.

Illinois Victims’ Economic Security and Safety Act (VESSA)

Under the amended version of this Act, an employer cannot discharge, refuse to hire, discriminate against, or retaliate against an employee because the employee used employer-issued equipment to record a crime of violence, including domestic violence and sexual violence, committed against the employee or their family or household member. Employers are also prohibited from depriving an employee of employer-issued equipment because the employee used the device to record or attempt to record such violence, and employers are required to provide an employee access to any photographs or recordings related to a crime of violence stored on an employer-issued device.

Nursing Mothers in the Workplace Act

Under the amended version of this Act, employers are required to provide reasonable break time to an employee who needs to express breast milk each time the employee has the need, for one year after the child’s birth. The amendment to the Act provides that the employer shall compensate the employee during the break time at the employee’s regular rate of compensation, and shall not require the employee to use paid leave during the break time or reduce the employee’s compensation during the break time in any other manner.

Equal Pay Act

Any business subject to the Equal Pay Act (i.e. with 100+ employees in Illinois), not just employers who are required to complete EEO-1 reports, must submit a list of all employees during the past calendar year, separated by gender, race, and ethnicity categories. Employers must also include the county in which the employee works, the date the employee started working for the business, and other information the Department deems necessary to determine if pay equity exists among employees, and report the total wages paid to each employee in the past calendar year.

The Equal Pay Compliance statement must also include a statement that the average compensation for its female and minority employees is not consistently below the average compensation for its male and non-minority employees within each “job category.” Job category” is now defined as one of the following: 1) executive/senior-level officials and managers, 2) first/mid-level officials and managers, 3) professionals, 4) technicians, 5) sales workers, 6) administrative support workers, 7) craft workers, 8) operatives, 9) laborers and helpers, and 10) service workers.

Family Military Leave Act

The amendment adds the requirement for employers who have 51 or more employees to provide paid leave for anyone performing “funeral honors details.” Qualifying employees may use up to 8 hours per calendar month, up to 40 hours in a calendar year (or more if the employer authorizes) to engage in funeral honors details.  A qualifying employee is one who is trained to participate in a funeral honors detail at the funeral of a veteran and is either a retired or active member of the armed forces or is an “authorized provider” or registered member of an organization that is an authorized provider of such funeral honors details. Employers must pay the employee his or her regular rate of pay for the leave taken under the Act and must not reduce the number of available hours of other forms of paid leave. Employees must provide reasonable notice as is practicable, and employers may request proof of the need for the leave. Employers may deny leave requests in certain limited circumstances, such as if the leave would, at an independent living facility, assisted living facility, nursing home, or any similar congregate care facility, or at a facility that provides 24/7 care, reduce staffing levels to below the established minimum or impair the safe and efficient operations of the facility.

Blood and Organ Donation Leave

Effective Jan. 1, 2026, HB1616 (Public Act 104-0193) amends the Illinois Blood and Organ Donation Leave Act to expand eligibility for blood and organ donor leave to part-time employees.

Under the amended law, both full-time and part-time employees may take up to 10 days of leave within a 12-month period to serve as organ donors. For part-time employees, employers must calculate and compensate leave based on the employee’s average daily pay over the prior two months.

Illinois Human Rights Act

Effective Aug. 15, 2026, SB2487 (Public Act 104-0425) amends the Illinois Human Rights Act (IHRA) to make fact-finding conferences for open charges of discrimination discretionary rather than mandatory. Parties may still request a fact-finding conference if they make a joint, written request for a conference within 90 days of the charge being filed.

SB2487 also introduces civil penalties “to vindicate the public interest” of $16,000 and up. As with existing penalties under the law, the penalties may be issued, upon recommendation by a hearing officer, by the Illinois Human Rights Commission or a three-member panel thereof.

Passed in 2024 and effective Jan. 1, 2026, HB3773 (Public Act 103-0804) amends the IHRA to prohibit the use of zip codes as a proxy for protected classes and the use of artificial intelligence (AI) in employment decisions, including in recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment, where use of AI has the effect of subjecting employees to discrimination on the basis of protected classes. Employers using AI must also disclose to employees when they are using AI in their hiring decisions.

Child Care Act of 1969

House Bill 3439 (HB 3439) amends the Child Care Act of 1969 to require that every employee or volunteer of a day care center authorize and undergo a criminal background check investigation once every five years.

Conclusion:

Illinois employers should consult with experienced employment counsel and review their employee handbooks and employment policies, along with their employment and separation agreements to ensure compliance with these new laws.  CCM’s employment law team is available to assist with review, compliance, and implementation. Please reach out to Ed Druck ([email protected]) or Abhishek Ramaswami ([email protected]) for assistance with employment law matters.