Illinois Labor and Employment Law Changes Effective January 1, 2026

By Franczek P.C.

February 18, 2026

As we start a new calendar year, Illinois employers need to be aware of several new laws that took effect on January 1, 2026. A PDF version of the “L&E Laws Taking Effect on January 1, 2026” is available here. We will provide a more comprehensive update covering these and other laws that will take effect in 2026 in the near future, however this alert serves as a timely reminder of key changes that may require more immediate attention:

AI Amendments to the Illinois Human Rights Act: Public Act 103-0804 amends the Illinois Human Rights Act (IHRA) by including new obligations on employers to monitor and mitigate the risks of artificial intelligence in employment practices. The amended Act prohibits AI that effectively discriminates against employees on the basis of statuses protected by the IHRA. Additionally, and perhaps most significantly, the amendment also prohibits employer-based AI from using zip codes as a proxy for protected status, such as race or national origin, opening up a new wave of considerations for employers. The zip code restriction requires employers to plan beyond the usual protected status and be very granular about how AI makes decisions. Illinois joins only a few other jurisdictions, including Colorado, Utah, and New York City, who currently regulate the use of AI in the employer context.

Modification of IDHR Investigation Procedures: Public Act 104-0425 amends IHRA to modify investigation procedures and clarify coordination between the Illinois Department of Human Rights (IDHR) and the Equal Employment Opportunity Commission (EEOC) in the investigation of employment discrimination charges. Key changes include:

-  Fact Finding Conference: The IDHR is no longer required to conduct a fact-finding conference in every investigation. Instead, the conference is discretionary unless both the complainant and respondent request a conference within 90 days of filing the charge. If requested, the parties must agree to grant a 120-day extension for the IDHR to issue its report.
-  EEOC Dual Filing: Charges filed with the EEOC within 300 days of the alleged violation are deemed filed with the IDHR on the same date. The IDHR will take no action until the EEOC completes its determination, and the complainant must provide the EEOC’s determination within 30 days of receipt. Investigation timelines will be tolled during EEOC review.
-  IDHR Civil Enforcement Penalties: The IDHR may impose specific civil enforcement penalties against employers “to vindicate the public interest.” The new civil penalty amounts range from $16,000 to $70,000 or higher per offense, based on the number of prior adjudicated violations against an employer or whether the perpetrating individual previously violated the IHRA.

Workplace Transparency Act Amendments: Public Act 104-0320 amends the Workplace Transparency Act by adding requirements for separate consideration in exchange for confidentiality provisions and prohibiting unilateral requirements of confidentiality in employment and separation agreements. The amended language further exempts certain legal proceedings, including depositions, from confidentiality clauses when criminal conduct is at issue. Specifically, any agreements entered into after January 1, 2026, may not include confidentiality provisions that restrict an employee from engaging in “concerted activities” to address work-related concerns, such as those for the purpose of collective bargaining or as otherwise provided under the National Labor Relations Act (as it existed in early 2025) and other laws enforced by state and federal agencies. The amended Act also requires separate consideration for any confidentiality provision contained in a separation or settlement agreement from any other consideration offered in exchange for a release of claims. Additionally, the Act expands the definition of “unlawful employment practice” and provides that confidentiality provisions cannot prohibit employees from engaging in “concerted activity” which is newly defined under the amended language. Lastly, the amended Act makes unenforceable any confidentiality provision or agreement that is unilateral and further prohibits parties from applying non-Illinois law to an Illinois employee’s claim or requiring a venue outside of Illinois to adjudicate an employee’s claim.  The Act also prohibits parties from including language seeking to shortened statute of limitations.

VESSA Amendments: Public Act 104-0171 amends the Illinois Victims’ Economic Security and Safety Act (VESSA) to protect employees who use employer-issued electronic devices to document instances of violence and restricts employers from enforcing rules that prohibit workplace recording if the recording is of an act of violence. The amendment aims to allow flexibility for emergency situations where it may not be possible to use anything else other than an employer-issued device to record vital audio or video footage of an incident of violence. Employers may not 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 also cannot deprive an employee of employer-issued equipment because the employee used the device to record or attempt to record such violence. Employers must also provide employees access to any photographs or recordings related to a crime of violence stored on an employer-issued device.

Blood and Organ Donation Leave Act: Public Act 104-0193 amends the Employee Blood and Organ Donation Leave Act to allow part-time employees to take leave for organ donation. This is only applicable to employers with 51 or more employees.

Nursing Mothers Act: Public Act 104-0076 amends the Nursing Mothers in the Workplace Act to strengthen workplace lactation break protections. Under the amendment, employers must provide paid break time at the employee’s regular rate of compensation for nursing mothers to express breast milk during the workday for up to one year after childbirth. While employers are prohibited from requiring employees to use other paid leave or reducing their pay during these “reasonable” lactation breaks, employers may continue to require that lactation breaks run concurrently with existing break periods.

Criminal Background Checks for Childcare Workers: Public Act 104-0307 amends the Child Care Act of 1969 by requiring criminal background checks every five years for employees and volunteers of day care centers, day care homes, and group day care homes. Additional language further provides that day care centers, day care homes, and group day care homes may hire, on a probationary basis, employees or volunteers who complete a fingerprint criminal background checks from either the FBI or the Illinois State Police, and  a criminal record check in each state where the employee or volunteer resided during the last 5 years. Pending the results of the background check requirements, the prospective employee or volunteer must be supervised at all times by an employee who received a qualifying result on all background check requirements.

Unemployment Insurance: Public Act 104-0285 amends the Unemployment Insurance Act to now include circumstances under which an individual who leaves work voluntarily may still qualify for unemployment benefits if they are unable to perform their job due to verified physical or mental health conditions.

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