Labor & Employment Law Update

Beginning January 1, 2027, Illinois employers will face expanded obligations under the Illinois Human Rights Act (IHRA). New amendments increase potential liability for employment policies that disproportionately affect protected groups and require employers to provide reasonable accommodations for menopause-related conditions. Employers should review workplace policies, accommodation procedures, and manager training programs before the changes take effect.

Illinois employers that require a valid driver's license in job postings may need to revise their hiring practices before January 1, 2027. A recent amendment to the Illinois Job Opportunities for Qualified Applicants Act—known as the “Ban the Box” law—prohibits employers from requiring a driver’s license in a job posting unless certain conditions are met. Employers that continue to include unnecessary driver’s license requirements could face enforcement action and civil penalties.

For Illinois employers, workers' compensation claims can create staffing challenges, disrupt operations, increase costs, and raise difficult questions about how and when an injured employee can return to work. The decisions made after an injury is reported often have a lasting impact on the claim and the employee's recovery. Fortunately, there are steps employers can take throughout the workers' compensation process to help reduce risk and improve return-to-work outcomes.

For Illinois contractors performing public work, prevailing wage compliance requires careful attention to worker classifications, payroll practices, and fringe benefit calculations. Recently, however, many contractors have reported audit findings and assessments that appear disconnected from Illinois Prevailing Wage Act (IPWA) requirements, established industry practice, and, at times, the Illinois Department of Labor’s (IDOL) own published guidance.

The consequences can be significant. Prevailing wage assessments can increase project costs, complicate bidding decisions, and expose contractors to repeat-violation penalties that may include debarment from public work. Even when employers disagree with an audit determination, the cost of challenging it almost always exceeds the amount in dispute.

Indiana employers received favorable guidance from the U.S. Court of Appeals for the Seventh Circuit on two common workplace benefits issues: voluntary “vacation buy” programs and the treatment of unused rollover paid time off. In a June 2026 decision of first impression under Indiana law, Clayton Creason v. Elanco US Inc., the court held that an employee's election to accept reduced compensation in exchange for additional PTO is not an assignment of wages subject to state statutory requirements. The court also confirmed that employers may enforce clearly drafted policies providing that certain rollover vacation hours expire rather than being paid out at separation. The ruling confirms that properly structured vacation-buy programs are not automatically treated as wage assignments and underscores the value of unambiguous PTO policies.

When Illinois expanded protections for genetic and biomarker information under the Illinois Genetic Information Privacy Act (GIPA), effective January 1, 2027, observers assumed the law was aimed at genetic testing and medical privacy. However, a close reading of the amendments through SB2886 is forcing some Illinois employers to ask: Did Illinois inadvertently prohibit workplace drug testing?

The U.S. Department of Labor’s (DOL) Wage and Hour Division recently issued three opinion letters addressing meal periods, tip pooling, and volunteer arrangements under the Fair Labor Standards Act (FLSA). Although the letters arise from hospitality, detention facility, and nonprofit settings, each provides practical guidance for employers reviewing their wage and hour compliance practices. Employers should take the opportunity to ensure their meal break, tip pooling, and volunteer policies align with the DOL’s latest interpretations.

Most employers assume a handbook policy is lawful if it serves a legitimate business purpose. However, that assumption can create risk under the current National Labor Relations Board standard. Even in nonunion workplaces, policies that appear reasonable may draw scrutiny if employees could interpret them as restricting rights protected by the National Labor Relations Act.

For employers this means an outdated handbook can become evidence in an unfair labor practice investigation. That’s why every employer should pay attention to the case that set the current standard: Stericycle.

On September 23, 2026, the National Labor Relations Board (NLRB or Board), in its decision in Lion Elastomers III, has acknowledged that its prior decision in Lion Elastomers II is no longer (and, really, never was) valid as establishing the standard by which to determine whether an employer may lawfully discipline or discharge an employee for engaging in abusive behavior, if that behavior is also tied to the employee’s protected, concerted activities (such as during a union organizing campaign, picketing, or when advocating for changes to employees’ terms and conditions of employment). 

The Equal Employment Opportunity Commission (EEOC) recently proposed eliminating the requirement for covered employers to provide workforce demographic information through the annual EEO-1 Report. If finalized, the change would reduce a longstanding federal reporting obligation for many employers.

However, employers should not assume that elimination of the report will make workforce demographic information irrelevant. To the contrary, employers may have good reasons to continue collecting and analyzing this information, even if they no longer have to submit it to the EEOC.