16 ILLINOIS BUSINESS LEADER EMPLOYMENT LAW By Abad Lopez Member, Dykema Sean Darke Member, Dykema New Compliance Obligations on AI, Leave, Pay a Employers should be aware of new Illinois employment laws that went into effect January 2026. Amendment to Illinois Workplace Transparency Act House Bill 3638 (Public Act 104- 0320), signed by Governor JB Pritz- ker 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 retal- iation,” 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 employ- ee claims; (ii) apply the law of anoth- er 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 poli- cy, void, and is severable from an otherwise valid agreement. The Nicholas Ustaski Associate, Dykema Gerardo Medina Associate, Dykema amendments also specify that when a separation or settlement agree- ment including confidentiality terms regarding unlawful employment practices, the consideration (com- pensation or benefit) for that confi- dentiality 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 express- ly 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 protec- tions 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
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