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Try It FreeWhat Illinois labor laws changed in 2026? Employers face new requirements affecting artificial intelligence in employment decisions, paid nursing breaks, leave for parents of babies in neonatal intensive care units, workplace agreements, and several other policies. Chicago and Cook County also raised local minimum wages on July 1.
This article focuses specifically on laws and wage changes effective in 2026, what they mean for Illinois employers, and actions businesses should take. For the ongoing rules covering overtime, employee breaks, PTO, payroll, and termination, see our complete Illinois labor laws guide.
Illinois Employment Law Changes in 2026 at a Glance
| 2026 Change | Effective Date | What Employers Should Do |
|---|---|---|
| AI use in employment decisions, Illinois Human Rights Act | Jan. 1, 2026 | Inventory hiring and HR AI tools, assess discrimination risks, review notice obligations. |
| Paid lactation breaks | Jan. 1, 2026 | Pay qualifying nursing breaks at the regular rate, and update break and payroll policies. |
| Workplace Transparency Act amendments | Jan. 1, 2026 | Review severance, settlement, confidentiality, and employment agreement templates. |
| VESSA protections for employer-issued devices | Jan. 1, 2026 | Update policies governing work devices and evidence of violence. |
| Paid organ donation leave extends to part-time employees | Jan. 1, 2026 | Update employee leave eligibility and pay calculations. |
| Family Neonatal Intensive Care Leave Act | June 1, 2026 | Provide qualifying unpaid NICU leave at employers with at least 16 employees. |
| Chicago minimum wage adjustments | July 1, 2026 | Verify $17.05 standard wage and $12.96 tipped wage for covered employees. |
| Cook County minimum wage adjustments | July 1, 2026 | Verify $15.40 standard wage and $9.25 tipped wage where the ordinance applies. |
Scope note: This summary highlights important employer-facing changes, not every Illinois law enacted or effective during 2026. Different employer-size and employee-eligibility rules apply to each law.
1. Illinois Regulates Discriminatory AI in Employment Decisions
Effective Jan. 1, 2026. An amendment to the Illinois Human Rights Act (Public Act 103-0804) makes certain uses of artificial intelligence in employment a civil rights violation. This is one of the most consequential 2026 changes for businesses using automated hiring or workforce decision-making tools.
What does the 2026 AI employment law prohibit?
An employer may not use AI in recruitment, hiring, promotion, training selection, discipline, termination, or other employment conditions when the AI use has the effect of discriminating on a basis protected by the Act. The amendment also prohibits using ZIP codes as proxies for protected characteristics in covered employment decisions.
The law addresses discriminatory outcomes, not just an employer's intent. A vendor's claim that its tool is unbiased does not eliminate an employer's responsibility to evaluate how the tool is used.
Does Illinois require notice when employers use AI?
The law also requires notice to employees concerning covered AI use. It directs the Illinois Department of Human Rights (IDHR) to adopt implementing rules, including when notice is required, timing, and how it is delivered. Businesses should check current IDHR guidance rather than assume a specific notice format or timing applies universally.
What employers should do
- Identify which applicant-tracking, resume-screening, interviewing, scheduling, performance, and HR systems use AI in employment decisions.
- Ask vendors about model inputs, validation, and discrimination testing, including possible proxy variables.
- Review outcomes and escalation procedures for adverse employment decisions.
- Document the purpose and human oversight of each covered system.
- Review IDHR rules and update employee notice practices as necessary.
2. Illinois Requires Paid Lactation Breaks
Effective Jan. 1, 2026. Public Act 104-0076 amended the Nursing Mothers in the Workplace Act to require employers covered by the Act to compensate nursing breaks at an employee's regular rate. The law generally covers employers with more than five employees and provides reasonable break time as needed to express breast milk for one year after a child's birth.
Employers may not require employees to use paid leave for these breaks or otherwise reduce compensation because the break was taken. The Act includes an undue-hardship standard, and federal protections may also apply.
What employers should do
- Update lactation and employee break policies to clearly specify paid time.
- Train managers not to deduct qualifying break time from wages or PTO balances.
- Check timekeeping and payroll workflows so eligible breaks are compensated correctly.
- Continue meeting requirements for appropriate private space and confidentiality.
|
3. New Unpaid NICU Family Leave Took Effect June 1
Effective June 1, 2026. The Family Neonatal Intensive Care Leave Act (Public Act 104-0259) creates a specific unpaid, job-protected leave entitlement for qualifying employees whose child is a patient in a neonatal intensive care unit (NICU).
| Employer Size | Maximum Unpaid NICU Leave |
|---|---|
| 1–15 employees | No entitlement under this particular state act, though other laws may apply |
| 16–50 employees | Up to 10 days |
| 51 or more employees | Up to 20 days |
Leave is limited to the time the employee's child is in the NICU, up to the applicable statutory maximum. Employees may elect continuous or intermittent leave, subject to the Act's rules. Employers may require reasonable verification of the length of the NICU stay but cannot demand protected confidential health information. The Act also includes reinstatement and benefit protections.
For employees also entitled to federal Family and Medical Leave Act (FMLA) leave, the Illinois Act provides qualifying leave after and in addition to FMLA leave, subject to its terms. Employers may not require an employee to substitute available paid leave for this entitlement.
What employers should do
- Add NICU leave to the handbook and manager training.
- Make sure payroll and HR staff can identify the correct entitlement by employer size.
- Track leave balances and document requests without collecting unnecessary medical details.
- Coordinate NICU leave with applicable FMLA and other leave rights.
4. Illinois Changed Rules for Employment and Severance Agreements
Effective Jan. 1, 2026. Amendments to the Workplace Transparency Act (Public Act 104-0320) strengthened limits on contract terms that restrict truthful disclosures about alleged unlawful employment practices and certain protected workplace activities.
The rules distinguish unilateral employment terms from certain mutually agreed agreements. They also place conditions on confidentiality provisions in settlement or termination agreements. In particular, employers should not assume a standard nondisclosure clause is enforceable merely because it appears in an otherwise signed agreement.
What employers should do
- Have employment counsel review offer letters, employment agreements, severance templates, settlement agreements, and confidentiality clauses.
- Make sure agreements do not improperly restrict legally protected reporting or truthful disclosures.
- Review any consideration, notice, and employee-choice requirements that apply to the specific agreement.
5. New VESSA Protections Apply to Work Devices
Effective Jan. 1, 2026. Public Act 104-0171 amended the Victims' Economic Security and Safety Act (VESSA). Employers generally may not discriminate or retaliate against employees because they used employer-issued equipment to document domestic, sexual, gender-based, or other covered violence affecting themselves or a family or household member.
The law also protects access to relevant photos, recordings, and other digital evidence stored on an employer-issued device, subject to the law's conditions. It does not eliminate otherwise reasonable workplace policies or legal duties involving investigations and court orders.
What employers should do
- Review company device, data access, and workplace safety policies.
- Train managers and IT staff not to punish protected use of a work device or improperly block access to covered evidence.
- Coordinate procedures for legally required preservation and disclosure of data.
6. Paid Organ Donation Leave Now Covers Eligible Part-Time Workers
Effective Jan. 1, 2026. Amendments to the Employee Blood and Organ Donation Leave Act (Public Act 104-0193) extended qualifying paid organ donation leave to part-time employees of covered employers. Eligible employees may receive up to 10 days in a 12-month period to serve as organ donors, with the conditions and approval process established by law.
For part-time employees, the law provides a method for calculating compensation using average daily pay during the prior two months. Employers should distinguish this organ donation provision from the law's separate rules for blood donation.
What employers should do
- Update leave eligibility language so eligible part-time employees are not omitted.
- Document approval and verification procedures.
- Apply the correct pay calculation for an eligible part-time employee.
7. Chicago and Cook County Raised Minimum Wages July 1
Effective July 1, 2026. Illinois's statewide minimum wage for covered adult workers remained $15 per hour, but Chicago and Cook County adjusted local rates. These increases are particularly important to employers with hourly teams and tipped employees.
| Location | Standard Hourly Rate | Tipped Cash Wage |
|---|---|---|
| Illinois statewide | $15.00 | $9.00 |
| Chicago (covered employers) | $17.05 | $12.96 |
| Cook County (covered suburban locations) | $15.40 | $9.25 |
Chicago's 2026 tipped wage phaseout schedule was changed, so employers should not rely on older projections about when the full tipped wage will equal the standard minimum wage. Cook County rules do not apply in Chicago or in municipalities that have opted out of the county ordinance. Confirm coverage and current notices through the City of Chicago and Cook County.
What employers should do
- Identify employees whose work occurs in Chicago or covered Cook County locations.
- Update payroll rates effective July 1, 2026, including the applicable tipped wage and employer tip-credit obligations.
- Check revised notices and required written wage communications.
- Audit hours, wage calculations, and overtime for affected pay periods.
Other 2026 Employment Changes to Review
Additional amendments may affect particular employers. For example, 2026 changes to enforcement and remedies under the Illinois Human Rights Act and wage laws can make old handbook language or compliance checklists incomplete. Rather than repeating the complete state labor law landscape here, employers should consult the Illinois labor laws employer guide for ongoing rules and review official agency guidance for the laws relevant to their workforce.
Illinois Employer 2026 Compliance Checklist
- HR software: Audit AI-assisted employment decisions, bias risks, and employee notice obligations.
- Break and time policies: Update paid lactation break procedures and ensure payroll treats covered time correctly.
- Leave administration: Add NICU leave and updated organ donation benefits where applicable.
- Agreements: Have legal counsel review confidentiality, separation, and employment agreement templates.
- Employee protection: Align work-device and workplace safety policies with VESSA.
- Payroll: Confirm Chicago and Cook County wage rates, tips, overtime, and required notices.
- Documentation: Record changes, train supervisors, and revisit policies when official agency guidance changes.
What Is Changing in Illinois in 2027?
Employers should also plan for requirements scheduled to take effect Jan. 1, 2027, including expanded paid jury service obligations for certain employers and higher income thresholds for Illinois non-compete and non-solicitation agreements. These are upcoming requirements, not changes effective in 2026. Verify any later amendments before implementation.
Illinois Labor Law Changes FAQ
What is the biggest new Illinois employment law for 2026?
That depends on the employer. Businesses using AI for hiring or other employment decisions should pay special attention to Illinois Human Rights Act changes effective Jan. 1. Employers with nursing employees and businesses with 16 or more employees may also be affected by paid lactation break and NICU leave requirements.
Did Illinois raise the statewide minimum wage in 2026?
No. The Illinois statewide minimum wage for covered adult workers remained $15 per hour. Chicago and Cook County increased their local minimum wages effective July 1, 2026, with different coverage rules.
Do Illinois employers have to provide paid NICU leave?
The new Family Neonatal Intensive Care Leave Act provides unpaid, job-protected leave to qualifying employees of employers with at least 16 employees. Separate laws or employer policies may provide additional benefits.
Are 2025 pay transparency and child labor changes new for 2026?
No. Those requirements were already in effect before 2026. They remain important, but their ongoing rules belong in the comprehensive Illinois labor laws guide, not in a list of laws newly effective in 2026.
Official Sources and Further Reading
- Illinois AI employment amendment, Public Act 103-0804
- Paid lactation breaks, Public Act 104-0076
- NICU leave, Public Act 104-0259
- VESSA device protections, Public Act 104-0171
- Illinois Department of Labor
- Illinois Department of Human Rights
- Cook County minimum wage
- Chicago minimum wage
Information is intended as general employer education, not legal advice. Check current official guidance and consult an employment professional about rules that apply to your business.
