Illinois Worker Transparency Act: What the 2026 Amendments Mean for You

The Illinois Worker Transparency Act (IWTA) was enacted in 2020 to combat workplace harassment and discrimination by limiting the use of confidentiality agreements to silence or otherwise discourage employees from reporting. Effective January 1, 2026, the IWTA will impose further obligations on employers for contracts entered into, modified, or extended on or after the effective date. These amendments aim to further bolster employee protections through a broadening of protected interests, increased remedies available, and a restriction on unilateral employment terms.

The Act’s provisions continue to apply to employers with one or more employees in Illinois employed for 20 or more weeks during a calendar year. To ensure compliance, employers with employees in Illinois should carefully review employee agreements and understand the changes coming in the new year.

Expanded Scope of IWTA & “Concerted Activity”

Originally, the Act only covered unlawful employment practices relating to discrimination, harassment, and retaliation. Now, the Act’s purpose explicitly includes a more expansive definition of unlawful employment practices, including “any practice made unlawful” by a state or federal law or agency. This includes Article 2 of the Illinois Human Rights Act, Title VII, laws enforced by state agencies like the Illinois Department of Labor, Illinois Labor Relations Board, and federal laws from the United States Department of Labor, Occupational Safety and Health Administration, or National Labor Relations Board.

The new amendments also include a prohibition against employers restricting “concerted activity.” As defined in the IWTA amendments, concerted activity encompasses any activity engaged in for the purpose of collective bargaining or other mutual aid. Essentially, the amendments now place an express ban on restricting through agreements or other documents the rights of employees to address work-related issues.

Essentially, the new scope of the IWTA covers violations under any state/federal employment law which can range from wage/hour protections, safety, labor rights, and so forth. No longer is the IWTA confined to discrimination or harassment claims. This expansion significantly broadens employers’ potential exposure.

Requirement of Mutuality

The new amendments, with the expanded definition of unlawful employment practices, create significant enforcement risk for employers that use one-sided employment agreements. Any provision that conditions employment on silence about alleged wrongful conduct, limits employee’s ability to report/participate in investigations, or requires waiver of statutory rights is likely unenforceable and void as against public policy. Statutory rights include commonplace provisions regarding shortening the Statute of Limitation period for potential claims, preferencing out-of-state venues in dispute resolution, or selecting non-Illinois law to govern over the contract. When such provisions are included in an employment agreement, it is imperative that there is separate consideration evidencing mutuality.

Agreements that attempt to impose these restrictions without mutuality, support from meaningful consideration, and/or express protections of employee rights are presumed invalid. Practically, employers are likely to run into this issue when using legacy or boiler plate language in employment contracts that have not been updated or sufficiently bargained-for between the employer and employee. Under the amended law, the lack of mutuality itself can render the provisions unenforceable and expose the employer to enforcement action.

Remedies Expanded

An employee with a successful claim under IWTA is entitled to reasonable attorneys fees and costs associated with challenging a contract for violation of this Act. Furthermore, under the amendments, a prevailing employee is entitled to consequential damages, signaling a considerable expansion of recovery. Consequential damages may encompass a wide range of indirect losses that flow from the violation, not just the immediate harm. Examples include lost earnings or other economic harm. These damages increase employers’ potential financial exposure upon a successful claim under the IWTA by an employee.

Right-to-Testify Protections

The amendments codify and reinforce public policy ensuring that employees cannot be barred from testifying about alleged criminal conduct or unlawful employment practices pursuant to a court order and/or request from an administrative agency.

Key Takeaways

The IWTA amendments substantially strengthen employee protections while significantly increasing compliance risks for employers through additional remedies and coverage. Inclusion of a broader definition of unlawful employment practices and prohibition on restrictions on concerted activity increase the actionable claims employees can bring under the IWTA. Requiring mutuality in employment agreement and expressly safeguarding employees’ right to testify work to limit one-sided, restrictive confidentiality provisions. Finally, broadening remedies can increase potential payouts when an employee brings a successful claim under IWTA.

Employers with Illinois employees should proactively review and revise employment-related agreements to ensure they are narrowly tailored, supported by meaningful consideration, and clearly preserve employees’ statutory rights. It is important to work with legal counsel experienced in Illinois law to ensure proper compliance with these amendments. As always, Danna McKitrick is here to assist.

Written by attorney Ruth Binger, with research and contributions by law clerk Jack Stiens.