Countdown to Compliance: Illinois Employers’ should Prepare for New Laws Becoming Effective in 2026

Newsletter

As the new year approaches, Illinois will ring in 2026 with a new wave of legislative changes impacting employment practices. Among the most notable are expansions to employee leave entitlements and new limitations on certain employment agreements under the Illinois Workplace Transparency Act. By understanding these developments early and implementing proactive policy updates, employers can position themselves for a smooth transition into the new year. The following highlights the key provisions employers should know and offers practical steps for maintaining compliance in the year ahead.

Extending Existing Employment Laws

Many of the changes Illinois employers will see in 2026 come through amendments to familiar Illinois employment statutes. With the exception of the Military Leave Act, the following amendments are set to take effect on January 1, 2026.

  • Illinois Workplace Transparency Act (IWTA): Recent amendments to the IWTA significantly broaden the scope of the statute and impose new restrictions on employment-related agreements. The IWTA focuses primarily on prohibiting confidentiality and arbitration provisions that limit disclosure of “unlawful employment practices”—which the Act previously defined as discrimination, harassment, or retaliation claims. The latest changes to the IWTA now extend the definition of “unlawful employment practices” to cover any practice made unlawful under the Illinois Human Rights Act or Title VII of the Civil Rights Act of 1964, or any other State of federal rule or law governing employment, including those that are enforced by the Illinois Department of Human Rights, Illinois Department of Labor, Illinois Labor Relations Board, Equal Employment Opportunity Commission, United States Department of Labor, Occupational Safety and Health Administration, and the National Labor Relations Board. This expanded definition now encompasses a wider range of potential claims that may be covered by the Act’s restrictions.

The amendments also strengthen employee rights regarding confidentiality and nondisclosure provisions. Employers may no longer require employees, applicants, or former employees to sign agreements that restrict their ability to report or discuss alleged unlawful employment practices or to engage in concerted activity to address work-related issues. In addition, unilateral employment agreements that purport to shorten the applicable statute of limitations, apply non-Illinois law to an Illinois employee’s claim, or require venue outside of Illinois to adjudicate an Illinois employee’s claim are now against public policy and void to the extent the provision denies an employee a substantive or procedural right or remedy.

Parties may still, however, mutually agree to provisions that would otherwise be against public policy, but only if the agreement is in writing, demonstrates actual, knowing, and bargained-for consideration, and acknowledges the right of the employee or prospective employee to: (i) report good faith allegations of unlawful employment practices to federal, state or local government agencies; (ii) report good faith allegations of criminal conduct to federal, state or local government agencies; (iii) participate in any proceeding related to unlawful employment practices, including any litigation brought by any federal, state, or local government agencies or any other person alleging the employer violated any state, federal, or local law, regulation or rule; (iv) make truthful statements or disclosures required by law, regulation or legal process; (v) request or receive confidential legal advice; and (vi) engage in concerted activity to address work-related issues. Employers should take note that acknowledgements (iii) and (vi) were amended from the Act’s previous version and therefore may necessitate changes to their existing mutual confidentiality agreement templates.

When it comes to severance or separation agreements specifically, confidentiality, nondisclosure, and non-disparagement provisions that include promises of confidentiality related to alleged unlawful employment practices now must also be supported by separate consideration—that is, something of value beyond what is provided in exchange for the release of claims. Nothing in the Act’s recent amendments appear to limit employers’ ability to unilaterally incorporate, with unique consideration, a confidentiality or nondisclosure provision that prohibits an employee from discussing the existence, terms, or conditions of the severance or separation agreement itself.

Ultimately, employers should review and update employment, separation, and settlement agreements to ensure compliance with the revised IWTA. These amendments underscore Illinois’ continued focus on transparency and employee protections, and failure to align existing practices could expose employers to enforcement risk.

  • Victims' Economic Security and Safety Act (VESSA): A new provision was added to VESSA, increasing employer obligations, as well as potential liability. As employers are likely already aware, VESSA was enacted to allow victims of violence to take up to two weeks of job-protected leave from work. This new provision expands protections for victims as it now also prohibits employers from discriminating or retaliating against employees who use employer-issued electronic devices to record or communicate about domestic violence, sexual violence, gender violence, or other violent crimes against the employees or their family or household members. Additionally, employers must grant employees access to information on those devices related to those crimes and must post a notice explaining employees' rights under the law. A copy of the required notice can be found here Required Posters & Disclosures - Employers.
  • Employee Blood and Organ Donation Leave Act: Part-time employees will now also qualify for 10 days of paid organ donation leave, which was previously only offered to full-time employees. Daily pay should be calculated based on the daily average pay the employee received during the last two months of employment.
  • Nursing Mothers in the Workplace Act: This amendment requires employers to provide compensated lactation breaks at the employee's regular rate of compensation. Employers may not require an employee to use paid leave for such purposes or reduce compensation for these breaks.
  • Illinois One Day Rest in Seven Act: This amendment added further protections for employees that raise complaints regarding violations of this Act. The amendment prohibits retaliation, adverse actions, or discrimination against employees for: (1) exercising a right under that Act; (2) making a complaint to their employer or the governing agency; (3) causing to be instituted any proceeding under or related to that Act; or (4) testifying in an investigation or proceeding under the Act.
  • Illinois Human Rights Act: Illinois employers will have new obligations related to their use of artificial intelligence in employment-related decisions. Employers must notify employees of their use of AI if being utilized with respect to employment decisions. Employers will also need to ensure that their use of AI does not: (1) have the effect of discriminating on the basis of protected classes and (2) use zip codes as a proxy for protected classes.
  • Military Leave Act (formerly known as the Family Military Leave Act): A new amendment expanded entitled leave to also include up to eight hours of leave per calendar month to participate in funeral honors, up to a total of 40 hours in a calendar year, for qualifying individuals. This law went into effect August 1, 2025.
New Leave Obligation for Illinois Employers

Brand new to the legal landscape in Illinois is the Neonatal Intensive Care Leave Act. Employers will be required to provide unpaid leave to all employees who have a child that is a patient in a neonatal intensive care unit. The amount of leave will depend on the size of the employer. Employers with a minimum of sixteen employees will be required to provide ten days of leave, while employers with more than fifty employees will be required to provide twenty days of leave. Noteworthy for employers is that leave granted under this Act is in addition to any leave an employee may otherwise be entitled to under the federal Family and Medical Leave Act. This law goes into effect June 1, 2026.

What Employers Should Do Now

To prepare for these upcoming changes, employers are encouraged to review and, where necessary, update their workplace policies and employment agreements. For more information about newly enacted laws and amendments, or compliance with other Illinois employment laws, please contact your Quarles attorney or:

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