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Takeaways
- New amendments significantly restrict how employers draft employment, separation, and settlement agreements.
- Expanded leave laws require immediate policy and handbook updates.
- New AI restrictions directly impact recruiting, hiring, and other employment decisions, with notice and anti-discrimination requirements.
As 2025 draws to a close, employers should be aware of new Illinois employment laws going into effect in January 2026.
Below is a summary of the upcoming changes to Illinois law:
Amendment to Illinois Workplace Transparency Act
House Bill 3638 (Public Act 104-0320), signed by Governor JB Pritzker on August 15, 2025, amended the Illinois Workplace Transparency Act ("WTA"). Previously, the WTA prohibits, among other things, contracts or agreements that prevent employees from reporting unlawful workplace conduct. The updated law broadens that restriction, now forbidding any agreement that limits an employee's ability to participate in concerted activities addressing workplace concerns.
The term "unlawful employment practice" has also been redefined. Instead of referring only to "unlawful discrimination, harassment, or retaliation," the statute now encompasses any act prohibited by the Illinois Human Rights Act, as amended, Title VII of the Civil Rights Act of 1964, as amended, and other applicable state or federal employment laws.
Further, under the Amended WTA, employment contracts can no longer include terms that: (i) shorten the statute of limitations for employee claims; (ii) apply the law of another state to claims involving Illinois employees, or (iii) require that claims be resolved outside Illinois.
Any clause attempting to do so is considered against public policy, void, and is severable from an otherwise valid agreement. The amendments also specify that when a separation or settlement agreement including confidentiality terms regarding unlawful employment practices, the consideration (compensation or benefit) for that confidentiality must be distinct from any consideration provided in exchange for releasing legal claims.
Lastly, confidentiality provisions related to unlawful employment practices can only be included if they reflect the employee's documented preference. Employers are expressly barred from inserting language stating that confidentiality was the employee's preference unless the employee has explicitly confirmed it.
Passage of Illinois Family Neonatal Intensive Care Leave Act
Effective June 1, 2026, House Bill 2978 (Public Act 104-0259), known as the Family Neonatal Intensive Care Leave Act, creates new protections for Illinois employees whose newborns require care in a neonatal intensive care unit ("NICU").
Under this law, Illinois workers are entitled to unpaid time off during the period their child is hospitalized in the NICU. Illinois employers with 16 to 50 employees must allow up to 10 days of leave, while employers with more than 50 employees must provide as many as 20 days of unpaid leave.
Amendment to Illinois Employee Blood and Organ Donation Leave Act
In August 2025, the Illinois Employee Blood and Organ Donation Leave Act was amended. House Bill 1616 (Public Act 104-0193) updates the Employee Blood and Organ Donation Leave Act to expand eligibility for organ donation leave. Under the new law, part-time employees can now take time off to donate an organ, a benefit that was previously available only to full-time workers. The amendment provides that for a part-time employee using leave to serve as an organ donor, the employer shall calculate the daily average pay the part-time employee received during his or her previous two months of employment and compensate the part-time employee in the amount of the daily average pay for the leave days used.
Amendment to Illinois Nursing Mothers in the Workplace Act
In August 2025, the Illinois Nursing Mothers in the Workplace Act was amended. Senate Bill 212 (Public Act 104-0076) updates the Illinois Nursing Mothers in the Workplace Act to strengthen protections for breastfeeding employees. The revised law requires employers to provide nursing mothers reasonable break time that is fully paid at their regular rate of pay. It also makes clear that employers cannot require workers to use paid leave or reduce their pay for taking this break time.
Amendment to Illinois Victims' Economic Security and Safety Act
In August 2025, the Illinois Victims' Economic Security and Safety Act was amended. House Bill 1278 (Public Act 104-0171) updates the Illinois Victims' Economic Security and Safety Act to offer stronger protections for employees who document violent crimes. Under the amended law, an employer cannot fire, refuse to hire, discriminate against, or retaliate against a worker for using company-issued equipment to record a crime of violence, including domestic or sexual violence, against themselves or a family or household member.
The law also prohibits employers from taking away company-issued devices because an employee used them to capture or attempt to capture such incidents. Additionally, employers must provide employees with access to any photos or recordings of violent crimes stored on company equipment.
Amendment to Childcare Act of 1969
In August 2025, the Illinois Childcare Act of 1969 was amended. House Bill 3439 (Public Act 104-0307) updated the Illinois Child Care Act of 1969 to strengthen background check requirements for employees and volunteers. Under the new law, anyone working at a daycare center, daycare home, or group daycare home must complete a criminal background check every five years.
The amendment also creates a secure background check program run by the Illinois Department of Early Childhood. Through this program, daycare providers can hire an employee or volunteer on a probationary basis if the individual receives a qualifying result as determined by the Department.
Artificial Intelligence in Employment
Beginning in January 1, 2026, House Bill 3773 will amend portions of the Illinois Human Rights Act to prohibit employers from using artificial intelligence ("AI") for many employment decisions including, "recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment," if such use discriminates employees on the basis of a protected class.
The statute amendment defines AI as a "machine-based system that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments."
The amended statute also makes it a civil rights violation for failing to notify employees of the employer's use of AI and for using zip codes as a proxy for protected classes. The law also requires employers to provide notice to applicants and employees whenever AI is used in employment decisions.
The statute does not provide specifics on how notice to employees should be given. Dykema attorneys will monitor for additional guidance from the Illinois Department of Human Rights.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
