Illinois Employment Law Update for 2026

The Illinois State Legislature wrapped up another busy year enacting and amending a wide range of employment laws. This alert provides an overview of what Illinois employers need to know about key legal developments that may affect their compliance obligations, including new leave entitlements and paid break time for nursing mothers, as well as significant changes to the Workplace Transparency Act and Illinois Victims Economic Security and Safety Act. 

New Laws for 2026

Family Neonatal Intensive Care Leave Act

Effective 1 June 2026, the Family Neonatal Intensive Care Leave Act (NICLA), Public Act 104-0259, requires employers with more than 15 employees to provide for unpaid leave while any child of an employee is a patient in a neonatal intensive care unit (NICU). Employers with 16 to 50 employees must provide up to of 10 days of unpaid NICLA leave and employers with more than 50 employees must provide up to 20 days of unpaid NICLA leave. A “child” is defined as an employee’s son or daughter who is a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis.

NICLA leave is unpaid and is in addition to any leave provided under the Family and Medical Leave Act (FMLA). Employees must first exhaust their FMLA leave entitlement and are then able to use NICLA leave if their child remains in the NICU. Similar to the FMLA, employees may take leave on a continuous or intermittent basis. However, employers may not require an employee to use any accrued paid time off prior to using NICLA leave although employees may elect to do so. Employers may require NICLA leave be taken in minimum increments of no less than two hours. 

During NICLA leave, employers must maintain an employee’s health insurance benefits and following NICLA leave, an employee must be returned to their former position or a substantially equivalent one with no loss of benefits held or accrued prior to taking leave. Employers may request reasonable verification of the length of the employee’s child’s stay in the NICU, but may not request any information protected under the Health Insurance Portability and Accountability Act of 1996 or other law. As is customary under employment laws, employees are protected from discrimination, harassment, or retaliation for exercising their rights under the NICLA.

Workers’ Rights and Worker Safety Act

Passed in August 2025, the Workers’ Rights and Worker Safety Act, Senate Bill 1976 (SB 1976), is aimed at preserving federal workplace safety standards in Illinois. SB 1976 provides that, if at any point after 28 April 2025, the United States Secretary of Labor revokes or repeals any previously promulgated federal Occupational Safety and Health Act (OSHA), Fair Labor Standards Act, or Coal Mine Health and Safety Act standards, the Illinois Department of Labor (IDOL) will adopt a statewide standard incorporating the previous federal standard as it existed prior to the US Secretary of Labor’s action. In addition, should the US Secretary of Labor amend or interpret any federal standard in a way that results in the standard becoming “less effective in providing safe and healthful employment and places of employment,” IDOL will take action to preserve the federal standard at it previously existed.

While SB 1976 does not define what it means for a federal workplace safety standard to become “less effective,” a press release from the Office of Governor JB Pritzker makes clear that the overarching intent of the SB 1976 is to ensure that long-established worker protections remain intact in Illinois in the event of any change to the substance or enforcement of federal safety standards.

Amendments to Existing Illinois Laws

Illinois Workplace Transparency Act

Beginning 1 January 2026, employers will need to carefully review all new, amended, and extended employment agreements to ensure compliance with amendments made to the Illinois Workplace Transparency Act (WTA). Previously, the WTA broadly prohibited any employment agreement from restricting an employee’s ability to report allegations of unlawful employment practices (discrimination, harassment, or retaliation) to officials for investigation. House Bill 3638 (HB 3638), which was signed into law on 15 August 2025, amended the definition of an “unlawful employment practice” to include not only discrimination, harassment, and retaliation, but also any violation of laws or rules enforced by IDOL, the Illinois Labor Relations Board, the US Department of Labor, OSHA, and the National Labor Relations Board. As such, beginning 1 January 2026, new and amended employment agreements must not restrict an employee’s ability to report violations of not only discrimination and harassment laws, but also laws and rules related to other employment issues such as collective bargaining, and wages and hours. HB 3638 also broadly forbids employment agreements from having any terms that restrict an employee’s ability to engage in “concerted activity,” defined as the right to collectively bargain, participate in labor organizations, and collectively discuss work-related issues like wages and benefits.

HB 3638 also prohibits employers from including any of the following unilateral terms in employment agreements: (1) terms shortening or purporting to shorten applicable statutes of limitations; (2) terms applying non-Illinois law to an Illinois employee’s claims; or (3) terms requiring that a venue outside of Illinois adjudicate an Illinois employee’s claims. Employers are still free to include such terms if they are mutual, i.e., negotiated in good faith for consideration in order to obtain or retain employment, and if the agreement makes express affirmations regarding the employee’s rights to report unlawful employment practices and to engage in concerted activity. However, any failure by the employer to ensure that such terms are mutual will result in a rebuttable presumption that the term is unilateral, against public policy, and should be void and severable from any otherwise enforceable contract. 

With respect to settlement and separation agreements, HB 3638 requires that for any employee promise of confidentiality related to alleged unlawful employment practices (other than violations of an employee’s right to engage in concerted activity, which can never be subject to a confidentiality agreement) to be enforceable, the confidentiality provision must be supported by distinct, bargained-for consideration that is separate and apart from any consideration provided for a release of claims or any other terms. Additionally, while confidentiality must be the “documented preference” of the employee, employers may not unilaterally put such a term in the agreement. 

Finally, HB 3638 makes clear that not only can employees testify concerning unlawful employment practices in courts and other more “traditional” venues, but also in arbitration hearings, as well as depositions taken in connection with any proceeding. HB 3638 also provides that employees are entitled to consequential damages in addition to attorneys’ fees for violations of the WTA, as well as for successfully defending any action for breach of a confidentiality agreement pursuant to the WTA.

Illinois Human Rights Act

Artificial Intelligence in Employment

Effective 1 January 2026, Illinois House Bill 3773 (HB 3773) amends the Illinois Human Rights Act, (IHRA) to expressly prohibit employers from using artificial intelligence (AI) that “has the effect of subjecting employees to discrimination on the basis of protected classes.” Specifically, Illinois employers cannot use AI that has a discriminatory effect on employees, “[w]ith respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment.”

HB 3773 also requires employers to notify employees and applicants when using AI during recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or when the use could affect the terms, privileges, or conditions of employment. The Illinois Department of Human Rights (IDHR) has not yet published a final rule implementing HB 3773.¹ However, Illinois employers should consider working with counsel to prepare these mandatory disclosures now to ensure compliance with HB 3773 by 1 January 2026.

Please see our blog post.

IDHR Fact-Finding Conferences 

Pursuant to Senate Bill 2487 (SB 2487), effective 1 January 2026, IDHR investigators will no longer be required to hold fact finding conferences as part of every investigation into charges of discrimination brought under the IHRA. Instead, fact-finding conferences will take place only at the discretion of the IDHR or if the complainant and the respondent submit a written request within 90 days after the charge is filed and the parties agree in writing to grant the IDHR an additional 120 days to complete its investigation. Additionally, under SB 2487, the Illinois Human Rights Commission may impose specific civil enforcement penalties on employers “to vindicate the public interest”. The maximum penalty depends on the employer’s history of prior violations ranging from US$16,000 to US$70,000. 

Illinois Victims’ Economic Security and Safety Act

The Illinois legislature passed House Bill 1278 (HB 1278) to amend the Illinois Victims’ Economic Security and Safety Act, which provides certain protections for employees who are victims of domestic violence, sexual violence, gender violence, or any other crime of violence. Effective 1 January 2026, employers must permit employees to use employer-issued electronic devices, such as cellular phones or laptops, to record incidents of domestic violence, sexual violence, gender violence, or other crimes of violence committed against themselves or their family or household members. Under HB 1278, employees must be allowed to access any recordings that are made using employer-issued devices and employers are barred from disciplining or retaliating against employees who make these recordings. Employers should review current technology and electronic device policies for compliance with HB 1278.

Employee Blood and Organ Donation Leave Act

Effective 1 January 2026, the Employee Blood and Organ Donation Leave Act (BODLA) will provide protected, paid leave for part-time employees in order to donate an organ. While the BODLA already allows full-time employees to take leave for both blood and organ donation, House Bill 1616 (HB 1616) amends the BODLA to provide up to 10 days of organ donation leave within any 12-month period to part-time employees as well. Employers must calculate the daily average pay earned by a part-time employee in the two months prior to the leave in order to determine compensation for any leave days used. Employers with 51 or more employees are subject to the BODLA’s requirements.

Nursing Mothers in the Workplace Act

Under the current Nursing Mothers in the Workplace Act (NMWA), Illinois employers with at least one employee are required to provide reasonable break time for employees to breastfeed or express breast milk for a period of up to one year after the child’s birth. Employees must be relieved of all duty and the break time may run concurrently with any break time already provided to the employee. Effective 1 January 2026, Senate Bill 0212 (SB 0212) will require that those breaks be paid at the employee’s regular rate of pay, unless doing so would create an “undue hardship” as defined in the IHRA. The IHRA defines “undue hardship” as “prohibitively expensive or disruptive” when considered in light of various factors, including the nature and cost of the accommodation needed; the impact of the accommodation upon the operation of the facility; and the overall size and financial resources of the employer. Pursuant to SB 0212, employers may not require employees to use paid leave for breaks or otherwise reduce their compensation for time spent expressing milk. Employers should review the lactation policies and modify them accordingly to comply with the amended NMWA. 

Military Leave Act (Previously the Family Military Leave Act)

Senate Bill 0220 amends the newly renamed Military Leave Act (previously the Family Military Leave Act) to require all employers with 51 or more employees to provide up to eight hours of paid leave per month, not to exceed 40 hours per year, to employees who participate in funeral honors details. Such leave must be paid at the employee’s regular rate of pay and available without first requiring exhaustion of other accrued leave. Employees qualify for this leave if they are (1) trained to participate in funeral honors details and (2) are either a retired or active member of the armed forces (including the Illinois National Guard) or an authorized provider of funeral honors details or registered member of an authorized provider. While employers may require reasonable notice of the need for leave, as well as confirmation from the relevant veteran’s service organization or other official notice, leave can only be denied when minimum staffing levels are necessary to ensure safety, specifically at care facilities such as nursing homes.

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. HB 3439 establishes a background check program to be administered by the Illinois Department of Early Childhood (IDEC), through which day care centers can hire probationary employees or volunteers after receiving a qualifying result from IDEC. While on probationary status, and until full clearance of the background check, the employee or volunteer must be supervised at all times by a fully qualified and cleared individual.

Next Steps

Employers should carefully review their employment agreements, policies, and practices to ensure compliance with these new requirements. Our lawyers in the Labor, Employment and Workplace Safety practice will continue to monitor for implementing rules, additional amendments, and other updates.