Illinois continues to blaze quite a trail for employee rights and benefits, through expanded paid leave, mandatory AI disclosures, and additional workplace protections. These legislative changes reflect national trends and therefore are noteworthy for employers in other states. They are also important for employers with employees located in multiple states, such as through remote work arrangements or other multi-site operations, for which significant questions may arise such as how to best provide paid leave and other benefits in both equitable and legally compliant ways.
What do nonprofit employers need to review? Employers should pay close attention to their own corresponding legal obligations and the ongoing changes to Illinois and other state legislature covering their respective employees. Employee handbook updates may well be warranted, along with modified employment practices. Here’s the Illinois list, and it’s long!
AI Usage in Employment Decisions – Illinois Human Rights Act
Considering artificial intelligence developments in the HR context, recent employment law developments provide an important framework for legally acceptable usage. Thanks to amendments to the Illinois Human Rights Act, effective January 1, 2026, employers are now prohibited from utilizing AI tools in a manner that subjects current or prospective employees to discrimination on the basis of identified protected classes (e.g., race, age), as well as ZIP codes (as a proxy for race) to reject a person in the context of recruiting, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or terms, privileges, or conditions of employment.
The Illinois Department of Human Rights (“IDHR”) recently provided a draft version of corresponding rules that provide employers insight on expected compliance measures. The draft rules apply to employers, their agents, and third parties acting on their behalf. Most notably, employers must give notice when they use AI to facilitate or influence a covered employment decision such as recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges or conditions of employment.
If required, notice must be provided by employers annually or within 30 days of adopting a new or substantially updated AI system. For prospective employees, notice must be included in the job posting. Notice must be posted (as applicable): (1) in employee handbooks or manuals; (2) in a conspicuous location on the employer’s physical premises where notices are normally posted; (3) in a conspicuous location on the employer’s intranet or external website where notices are normally posted (also must be accessible through a conspicuous link on the homepage); and (4) in any job posting. Content of the notice must include: (1) name of the AI product and its developer and vendor if applicable; (2) employment decisions the AI system will influence or facilitate; (3) purpose of the AI system and categories of personal information or employee data collected or processed by the system; (4) types of job positions for which AI will be used; (5) employer point of contact for questions about the AI system; (6) the right to request reasonable accommodations and how to request it; and (7) statutory language found in 775 ILCS 5/2-102(L). Employers must preserve notices, postings, and disclosures regarding AI usage for four years. Prudent employers thus should weigh the benefits of AI use in employment-related decisions against the resulting exhaustive list of legal compliance measures.
Other Illinois Human Rights Act Expansion: Protected Classes and Time Period
The Illinois Human Rights Act’s coverage of protected classes includes race, color, religion, sex, sexual harassment, national origin, ancestry, age (40 and over), sexual orientation, gender identity, disability, pregnancy, arrest record, citizenship and immigration status, and military status. Per the Act’s amendments, two new protected classes have been added: “family responsibilities” and “reproductive health decisions” discrimination. It is quite common for employee handbooks to contain an “EEO” (equal employment opportunity) statement providing related information about protected classes. Keep in mind, however, that EEO statements are not legally required. If used, which is typically a best practice, they need not contain such a detailed list. Instead, the list may be shorter and illustrative only, providing some but not all categories. Note too that certain religious liberty protections or bona fide occupational qualifications may apply that warrant a different approach, such as for ministerial jobs.
Additionally, the Act’s statute of limitations to file state discrimination claims has now increased from 300 days to 2 years. This expansion significant increases employers’ potential exposure to liability, especially since the time period for a federal discrimination claim is only 180 days. Employers may thus see more discrimination claims filed under state law, with this expanded limitation period. Note too that the Act applies to all employers – that is, one or more employees (as expanded from a 15-employee threshold per a 2020 amendment). Based on this change, employers should keep detailed employment records for longer periods of time and consider lengthening their document retention practices accordingly.
Pay Stub Disclosures - Illinois Wage Payment and Collection Act
Effective January 1, 2025, the amended Illinois Wage Payment and Collection Act requires employers to comply with modified pay stub obligations. Detailed paystubs must be provided to employees each pay period and copies of them must be kept for three years. The following must be included on each pay stub: (a) hours worked, (b) rate of pay, (c) overtime pay, (d) overtime hours, (e) gross wages earned, (f) all deductions, and (g) year-to-date totals of wages and deductions. Employees, current or former, can request copies of pay stubs up to twice per 12-month period. More than one year after separation, an employer is no longer required to grant a former employee’s request for pay stubs. Employers must provide requested pay stubs to employees or eligible former employees within 21 calendar days. Former employees may request either physical or electronic copies, and the employer must provide the format requested.
Expanded Employee Protection - Illinois Whistleblower Act
An amendment to the Illinois Whistleblower Act, effective January 1, 2025, clarified the definition of “employee” for purposes of the Act to not include independent contractors. In this determination, the test used to determine whether a worker is a covered employee or not includes the following: (a) the worker is free from the control of the employer; (2) the worker performs work in the usual course of business of the employer; and (3) the worker is in an independently established trade or occupation. Such workers are not covered. (See also our W&O blog addressing the employee versus independent contractor distinction.)
Under the amended Illinois Whistleblower Act, certain employee disclosures now receive greater protection against retaliation. Employers may not retaliate against employees who, in good faith, disclose or threaten to disclose to a public body during an investigation, court proceeding, or administrative proceeding information regarding the employer’s conduct related to potential violations of law, regulations, or conduct that poses substantial and specific danger to employees, public health, or safety. Second, employers may not retaliate against employees who, in good faith, disclose or threaten to disclose to a government or law enforcement agency information regarding employer conduct that potentially violates a law or regulation or poses substantial and specific danger to employees, public health, or safety. Third, they may not retaliate against an employee who, in good faith, discloses or threatens to disclose to a supervisor, principal officer, board member, or supervisor in an organization with a contractual relationship with the employer any employer conduct that potentially violates a law, regulation, or poses a substantial or specific danger to employees, public health, or safety.
The Act also increases protections for employees to refuse to participate in employment-related activities that the employee, in good faith, believes would result in a violation of law or regulations. As such, employers cannot retaliate against such employees for their refusal. Retaliatory action includes any adverse action by an employer that would dissuade a reasonable worker from making a protected disclosure or refusal. Penalties for doing so include injunctive relief for the employee, 9% yearly interest on the employee’s back pay, liquidated damages up to $10,000, and a $10,000 civil penalty payable to the employee. Lastly, the Illinois Attorney General can initiate civil claims against employers for violations of the Illinois Whistleblower Act.
Updated Victim Protections - Victims’ Economic Security and Safety Act
Effective January 1, 2026, the amended Victims’ Economic Security and Safety Act (“VESSA”) provides strengthened protections for employees who are victims of domestic violence, sexual violence, gender violence, or any other crime of violence. Employers must now allow employees to use employer-issued electronic devices, such as cell 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. Employers may not discharge, refuse to hire, discriminate against, or retaliate against an employee because the employee used employer-issued equipment in this manner. Correspondingly, employees must also be allowed access to any recordings that are made using employer-issued devices.
Based on these legal changes, employers should consider updating their acceptable use policies and removing restrictions on using such devices for personal matters. In particular, such policies can include explicit exceptions allowing these VESSA-related activities. Employers should also ensure supervisors and managers are trained regarding these protected uses of employer devices.
The amended VESSA affects the employee separation process too. Often, employers require the immediate return of company equipment upon separation, but before collecting such equipment, employers should ensure that employees can access or obtain any information pertinent to acts of violence therein. Employers should provide a reasonable time frame for employees to retrieve this information.
Enforceable Confidentiality Requirements - Workplace Transparency Act
The Workplace Transparency Act previously prohibited any employment agreement from restricting an employee’s ability to report allegations of “unlawful employment practices.” Effective January 1, 2026, this Act's amendment expands the term “unlawful employment practice” to include not only discrimination, harassment, and retaliation, but also any violation of laws or rules enforced by the Illinois Department of Labor, Illinois Department of Human Rights, the Illinois Labor Relations Board, Equal Employment Opportunity Commission, the U.S. Department of Labor, Occupational Safety and Health Administration, and the National Labor Relations Board. This expansion is huge!
As one significant legal implication of this legislative change, employers may need to modify their settlement agreements, severance packages, and separation agreements with respect to certain confidentiality promises that may or may not be desired by employers as part of employee separation arrangements. More specifically, to the extent that such confidentiality language may potentially cover alleged unlawful employment practices as described above, employers must now provide valid, bargained-for consideration separate from any consideration provided in exchange for a release of related claims. In other words, the agreement may need to specify that a portion of the money to be paid by the employer is allocable specifically to the person’s confidentiality obligation regarding alleged employer wrongdoing. For example, if Employee A possessed evidence indicating that an employer had discriminated unlawfully against Employee B, Employee A would not be legally required to keep such evidence confidential – absent separate payment by the employer to Employee A.
This type of confidentiality provision is valid and enforceable so long as the following conditions are satisfied, as reflected in writing (e.g., in a separation agreement): (1) confidentiality is the employee’s documented preference and is mutually beneficial to both parties, (2) the employer notifies the employee of his or her right to have an attorney or representative review the agreement before its execution; (3) there is valid, bargained for consideration in exchange for such confidentiality separate from any consideration provided in exchange for the release of claims; (4) there is no waiver of any claims of unlawful employment practices that accrue after the execution of the agreement; (5) the employee has given 21 calendar days to consider the confidentiality requirement; and (6) unless knowingly and voluntarily waived by an employee, he or she has 7 calendar days following execution to revoke the agreement, and the agreement is not enforceable until the revocation period is over. These time-related requirements are the same as for separation agreements involving persons who are at least 40 years old, but they are specific to the amended Workplace Transparency Act. Such confidentiality requirements are separate from other standard confidentiality provisions, such as regarding the existence of the agreement’s terms (e.g., amount of severance pay) and maintaining the employer’s confidential information (e.g., finances, donor relations, other operational matters).
Employers may still offer a total severance amount in exchange for a release of all claims. But for employers’ optimal legal protection, it may be better for a discrete and specifically identified portion of the severance amount to be allocated to this specific type of released claim. With that approach, the confidentiality provisions must be: (a) presented as a separate and optional provision; (b) supported by separate consideration from the release payment; and (c) clearly itemized in the agreement document. An employer thus could offer an employee a certain sum in exchange for his or her promise to maintain confidentiality regarding the broadened scope of potentially unlawful employment practices, along with a separately identified sum in exchange for release of employment-related claims and other promises contained in a separation agreement. Another approach would be to not require any confidentiality regarding alleged unlawful employment practices, and therefore to not provide for separately identified severance amounts. Some may view this approach as more fair-minded overall, particularly to avoid any connotation that the employer is seeking to cover up unlawful actions.
Other Workplace Transparency Act Amendments
The Illinois Workplace Transparency Act’s amendments additionally prohibit employers from entering into agreements with employees that would prevent them from making truthful statements or disclosures about alleged unlawful employment practices or engaging in protected “concerted activity” to address work-related issues, as a condition of initial or continued employment. The phrase “concerted activity” is statutorily defined as “activities engaged in for the purpose of collective bargaining or other mutual aid or protection” under applicable federal and state law. Consequently, this prohibition applies to both (a) already existing worker unions, and (b) possible formation of unions.
Other changes under the amended Workplace Transparency Act now prohibit employers from including any of the following requirements in employment agreements: shortening or purporting to shorten applicable statute of limitation; applying non-Illinois law to an Illinois employee’s claims; or requiring that a venue outside of Illinois adjudicate an Illinois employee’s claims. But as an important caveat, employers may include such terms if they are mutually agreed upon, 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. Employees can continue to testify concerning unlawful employment practices in courts, arbitration hearings, and depositions. Employees are also now entitled to consequential damages (non-economic) and attorneys’ fees for violations of the Workplace Transparency Act, which significantly increases employers’ potential liability exposure.
Paid Breaks - Nursing Mothers in the Workplace Act
Generally speaking, employers may provide work breaks on a paid or unpaid basis. Federal law does not impose any such requirements, and state laws can vary widely. Under Illinois law, short paid breaks of 5 to 20 minutes are legally required, as well as unpaid meal breaks of at least 20 minutes (although employers may provide them on a paid basis too).
Under the Illinois Nursing Mothers in the Workplace Act, effective January 1, 2026, employers are now required to pay employees during “reasonable” break times used to express breast milk for up to one year after the birth of their child. During such breaks, employees must be relieved of all duties. This paid break time may run concurrently with any break time already provided to the employee. Employees must be compensated at their regular rate of pay during these lactation break periods. Employers may only deny paid reasonable break time if the employer can demonstrate providing this break time would constitute undue hardship. Undue hardship is defined as “prohibitively expensive or disruptive” based on various factors, including the nature and cost of the accommodation needed, impact of the accommodation on operations of the facility, and the overall size and financial resources of the employer. The determination is very fact specific.
New Leave Benefit - Neonatal Intensive Care Leave Act
Effective January 1, 2026, the Neonatal Intensive Care Leave Act provides unpaid, job-protected leave to employees whose newborn child is a patient in a neonatal intensive care unit. “Child” under the Act is defines as an employee’s son or daughter who is a biological, adopted, or foster child, stepchild, legal ward, or a child of a person standing in loco parentis. Employers with between 16-50 employees are required to provide up to 10 days of unpaid leave. Employers with 51 or more employees are required to provide up to 20 days of unpaid leave.
This leave may be taken on a continuous or intermittent basis, at the employee’s selection. Employers may not require concurrent use of paid leave time during the neonatal intensive care leave period, though employees may elect to do so. Employees must first exhaust their FMLA leave and then are able to use leave under this Act if their child remains in the NICU. Employees must be reinstated to their former position or a substantially equivalent position upon completion of their leave. Employers may require this leave be taken in minimum increments of two hours or more. Employers must maintain the employee’s health insurance and benefits during the leave. Employees are protected from discrimination, harassment, or retaliation for exercising their rights under this law.
Updated Leave Benefit - Employee Blood and Organ Donation Leave Act
Beginning January 1, 2026, part-time employees now have paid leave rights to serve as blood and organ donors –along with full-time employees too. Only employers with 51 or more employees are subject to the Employee Blood and Organ Donation Leave Act. The Act previously allowed full-time employees to take leave for blood and organ donation. More specifically, they could take up to 10 days of organ donation leave within any 12-month period, as well as up to 1 hour to donate blood every 56 days in accordance with appropriate medical standards established. For part-time employees serving as organ donors, an employer should calculate the part-time employee’s daily average pay received during their previous two months of employment and compensate part-time employees the amount of that daily average for the leave days used, with due consideration for a potential situation involving: (1) a part-time employee; (2) who has run out of available paid leave; and (3) is therefore entitled to paid leave per this Act.
Funeral Honors Leave - Illinois Military Leave Act
The Illinois Military Leave Act was formerly called the Family Military Leave Act and was amended effective August 1, 2025. The Act requires all employers with 51 or more employees to provide up to 8 hours of paid leave per month, not to exceed 40 hours per year to employees who participate in funeral honors details. These employees must be paid at the employee’s regular rate of pay. This leave is available to an employee who has been employed by the same employer for at least 12 months during the preceding time period and at least 1,250 hours during such time period. This leave is available without first requiring the exhaustion of other types of accrued leave.
Employees qualify 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. 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. Employers may only deny leave when minimum staffing levels are necessary to ensure safety, specifically at care facilities such as nursing homes. Unless employers can show high stakes, it is very likely this leave will have to be granted.
Employee Verification - Right to Privacy in the Workplace Act
At the beginning of January 2025, the Illinois Right to Privacy in the Workplace Act was amended prohibiting employers from requiring work authorization verification requirements if those exceed what is required under federal law. If an employer finds discrepancies in an employee’s verification information, the employer must provide the employee notice of this information and cannot take adverse action against an employee in the event a discrepancy in the employee’s work authorization arises.
Similarly, on December 15, 2025, the Act was amended again to prohibit employers from taking adverse actions against their employees if the employers receive written notice of a discrepancy involving an employee’s taxpayer number or ID number. The employer, upon receipt of the notice, is required now to notify the employee and any authorized representative within five (5) business days. This notice to the employee must explain the discrepancy, the deadline to contest it, any required action, and must be delivered to the employee in person.
Employee Access to Personnel File - Personnel Record Review Act
The Personnel Record Review Act’s 2025 amendments increase employees’ rights to access their personnel records. Employers with five or more employees now must provide access to benefits-related records, employment contracts, handbooks, and policies that affect employment qualifications. Additionally, employees can request records via email or text message and can specify to receive records in hardcopy or electronic formats. Employees can authorize a representative to inspect such records, i.e. family members, attorneys, union officials, or translators. Employers are required to comply with the employee’s request within seven working days after receipt, with the possibility of an additional seven days if the employer can reasonably show the deadline cannot be met.
Notably, many employers maintain files for their employees that are both over-inclusive and under-inclusive in terms of what constitutes an employee’s personnel records. For example, they may omit payroll records that are maintained through separate computer software. In addition, they may include documentation related to organizational planning and work force structuring affecting multiple employees, which may qualify for an exception. Other exceptions may include attorney-client privileged communications, investigative or security records involving criminal or other misconduct by the employee, and financial information about the employer.
Typical personnel records include initial hire information, any written contract, onboarding and periodic training materials, employee handbooks, paid and unpaid leave information, job descriptions, pay raises, job evaluations, and disciplinary records. Medical records may be appropriate to maintain separately, not as part of a personnel file, in order to support an employer’s compliance with disability laws or health-related discrimination laws.
Careful review is thus often warranted to evaluate what specific records should and should not be provided to employees. Two great preparatory steps for legal compliance are: (a) to make sure that each employee has a personnel file, and (b) to keep the personnel file reasonably current. When a personnel record request is made, an employer can then respond promptly and properly with the appropriate disclosure of materials. Secure document-management systems will also promote rapid and effective searches and retrievals of employee files.
Final Observations
This extensive list of Illinois’ new employment laws shows that employers need to check carefully for resulting implications for their employees. Perhaps not all paid leave benefits need to be included in updated employee handbooks, and many of the expanded legal protections become applicable only under certain circumstances. Staying informed about these developments should help employers to be ready amidst a myriad of employee needs, asserted rights, and concerns. In turn, employers can care well for their employees who, after all, are most likely their greatest organizational assets.
