WEBINAR: New Year, New Laws

As we ring in 2025, big changes are coming for Illinois employers navigating the new labor and employment laws. Start the year off right and watch as we break down the key updates that could impact your workplace in the months ahead.

 

 

 

Transcript:

Introduction

Amy: Illinois employers are navigating an avalanche of new laws in 2024, with more on the horizon in 2025. Today we are here to discuss the key updates that Illinois employers should be aware of for 2025. We will start with the new laws in 2025 and, if we have time, we will review some of the new laws that went into effect in 2024—just in case they remain unchecked on your internal compliance to do list.

Madeline: There are a plethora of new laws that became effective in 2024 and as of January 1, 2025, including 293 new Illinois laws that went into effect January 1, 2025. As it would be impossible for us to cover them all, today we will touch on the most significant employment-related laws that we believe everyone should be aware of. Let’s get started.

2025: Illinois Increase in Minimum Wage

Madeline: First, let’s talk about the changes to minimum wage. Minimum wage in IL increased $1 per hour to $15 per hour for workers 18 years old or older and to $13 per hour for youth workers (meaning those under 18) who work fewer than 650 hours per calendar year. Additionally, the minimum wage for tipped workers is now $9 per hour.

2025: Amendments to the Illinois Freedom to Work Act

Madeline: Next, the Illinois Freedom to Work Act has extended the noncompete and non-solicitation restrictions to address specific professions. Now, covenants not to compete or covenants not to solicit cannot be enforced on any mental health professional providing mental health services to veterans and first responders if the restriction is likely to result in an increase in cost or difficulty for any veteran or first responder seeking mental health services. In addition, the Illinois Freedom to Work Act now prohibits any covenant not to compete or covenant not to solicit with respect to construction workers, regardless of whether an individual is covered by a collective bargaining agreement.

2025: Amendments to the Illinois Human Rights Act

Madeline: Moving on. The Illinois Human Rights Act was amended in 4 ways:

1. It is now unlawful for employers to discriminate against or harass employees based on their family caregiving responsibilities. The legislation adds “family responsibilities” as a protected class, making it unlawful to refuse to hire, deny a promotion, or discharge an employee based on the employee’s “actual or perceived” responsibility to provide “personal care” to a family member.
2. Illinois employers are now prohibited from discriminating against employees for actual or perceived “reproductive health decisions.” The law now defines “reproductive health decisions” broadly as “a person’s decisions regarding the person’s use of: contraception, fertility or sterilization care; assisted reproductive technologies; miscarriage management care; healthcare related to the continuation or termination of pregnancy; or prenatal, intranodal, or postnatal care.” While the law does not explicitly impose any new leave or accommodation requirements on employers, employers should be mindful of their employees’ rights to be free from discrimination on the basis of reproductive health decisions.
3. The statute of limitations deadline to submit an alleged civil rights violation with the Illinois Department of Human Rights was extended from 300 calendar days to 2 years.
4. Employers are now prohibited from using artificial intelligence (“AI”) to discriminate in connection with employment decisions and requiring employers to notify employees when AI is being used for employment-related reasons.

2025: Amendments to the Illinois Whistleblower Act

Madeline: Next, the Illinois Whistleblower Act was amended to expand the definitions of “employer” and “employee,” while clarifying the definitions of “adverse employment action,” “public body,” “retaliatory action” and “supervisor.” Additionally, employers are now subject to greater penalties for retaliating against employees for disclosing their employer’s potentially unlawful activities pursuant to the Whistleblower Act.

2025: Amendments to the Illinois Wage Payment and Collection Act

Madeline: The Illinois Wage Payment and Collection Act was amended to require that employers maintain copies of an employee’s pay stub for at least 3 years after the date of payment, regardless of whether the employee’s employment ends during this period. Additionally, employers must now provide pay stubs to current and former employees upon request within 21 calendar days.

2025: Amendments to the Illinois Equal Pay Act

Madeline: The Illinois Equal Pay Act was amended to require employers with at least 15 employees to include “pay scale and benefits” information in all job postings, both internal and external. The law defines “pay scale and benefits” broadly as “the wage or salary, or wage or salary range, and a general description of the benefits and other compensation … that the employer reasonably expects in good faith to offer for the position.” Additionally, employers are now required to announce, post, or otherwise make known all opportunities for promotion to current employees no later than 14 calendar days after making an external job posting for the same position.

Employers who fail to comply with the pay transparency mandates face penalties of up to $500 for a first offense, $2,500 for a second offense, and $10,000 for a third or any subsequent offense. Employers will have a short period to cure the first and second offenses before fines are issued, but there is no opportunity to cure third or subsequent offenses.

2025: Amendments to the Illinois Personnel Records Review Act

Madeline: Next, the Illinois Personnel Records Review Act, which applies to employers with 5 or more employees, was amended in a few different ways.

1. First, the list of documents that employees have the right to make a request to inspect, copy, and receive copies of was expanded to include:
   1. Any employment-related contracts or agreements that the employer maintains are legally binding on the employee;
   2. Any employee handbooks that the employer made available to the employee or that the employee acknowledged receiving; and
   3. Any written employer policies or procedures that the employer contends the employee was subject to and that concern qualifications for employment, promotion, transfer, compensation, benefits, discharge, or other disciplinary action.
2. Second, the request must now be in writing. It is no longer at the employer’s discretion to require it be in writing or not. The Act was also amended to provide the proper method of making a request.
3. Third, “an employer’s trade secrets, client lists, sales projections, and financial data” was added to the list of documents that are exempt from the employee’s right to inspection, which employees do not have any right to.
4. Fourth, if an employer does not maintain records in one or more of the required categories of documents requested, the employer may respond in writing notifying the employee that the employer does not maintain records in that category. However, the employer must still permit inspection, copying, and receipt of copies of any other category requested as to which the employer does maintain records.
5. Fifth, the request may now be made in electronic format, including emails and text messages.
6. Sixth, the employer may still charge a fee limited to the cost of duplicating the requested record but may not include the imputed costs of time spent duplicating the information, the purchase or rental of copying machines, the purchase or rental of computer equipment, the purchase, rental, or licensing of software, or any other similar expenses.
7. Finally, an employee may still commence an action in the circuit court to enforce the provisions of the Act, including actions to compel compliance, if an employer is alleged to have violated the Act, but now only after the Illinois Department of Labor has failed to resolve the complaint within 180 calendar days after the complaint is filed with the Department, or the Department certifies in writing that it is unlikely to be able to resolve the complaint within that 180 calendar days.

2025: Illinois Child Labor Law

Madeline: Illinois repealed and replaced the existing child labor law. The new law, which applies to minors aged 15 and younger, introduces changes to the hours minors are allowed to work, specifies additional prohibited occupations for minors, and adds a provision prohibiting discrimination and retaliation. It also calls out minors 13 years old and younger as those who may not be employed “in any occupation or at any worksite” unless explicitly authorized by or exempted under the Act.

2025: Amendments to the Illinois Right to Privacy in the Workplace Act

Madeline: The Illinois Right to Privacy in the Workplace Act was amended to create several employment protections for individuals when employers use the federal E-Verify system. Employers that continue to use federal E-Verify must now:

1. Incorporate new requirements into their employment verification practices so that they do not impose work authorization requirements greater than those required under federal law; and
2. Provide a notice to each current employee and their authorized representatives, if any, by posting in English and in any language commonly used in the workplace, of any inspections of I-9 Employment Eligibility Verification forms or other employment records conducted by the inspecting entity within 72 hours after receiving notice of the inspection. On or before July 1, 2024, the Department of Labor will develop a template of this notice, which will be available on its website.

2025: Illinois Worker Freedom of Speech Act

Madeline: The new Illinois Worker Freedom of Speech Act prohibits employers or an employer’s agent, representative, or designee from discharging, disciplining, or penalizing, or threatening to discharge, discipline, or penalize, or take any adverse employment action against an employee for declining to participate in certain employer-sponsored meetings on religious or political matters. Additionally, employers must post and keep posted a notice of employee rights under the Illinois Worker Freedom of Speech Act where employee notices are customarily placed within 30 days after the effective date of January 1, 2025.

Aggrieved employees may bring a civil action to enforce any provision of the Illinois Workplace Freedom of Speech Act within one (1) year after the date of the alleged violation. In addition, employees may also file a claim with the Illinois Department of Human Rights within three (3) years after the alleged conduct. The employer will be assessed a civil penalty of $1,000 for each violation, payable to the Department. Each employee who is subject to a violation will constitute a separate violation.

2025: Updates to Illinois Military and Veteran Status Protections

Madeline: A vast number of measures impacting veterans and their families have taken effect. While there are many, we only have time to discuss a few:

1. The Illinois Statute on Statutes was amended to expand the definition of armed forces or uniformed services to include the U.S. Space Force for purposes of employment protections for military service members.
2. The Illinois Vital Records Act was amended so that death certificates can now include details about a deceased individual’s military service, helping families access survivor benefits.
3. The Illinois Department of Veterans’ Affairs Act requires the Illinois Department of Veterans Affairs and the Illinois Department of Labor to create and make available, at no cost, a poster highlighting free veterans’ benefits and services.
4. The Illinois Consumer Fraud and Deceptive Business Practices Act now includes updated disclosure requirements to ensure veterans are fully aware of their options and that all county veteran service officers are VA accredited. It is now an unlawful practice for any person providing veteran or military benefits services to fail to clearly provide, both orally and in writing, veterans services disclosures when veteran or military benefits services are provided in exchange for any financial compensation, benefit, or thing of value.

2025: Amendments to the Illinois Insurance Code

Maura Ann: With regard to insurance coverage in all individual and group policies, the Illinois Insurance Code has been amended to:

1. Extend hearing aid insurance coverage to all ages, rather than just to those under the age of 18;
2. Require insurers cap the insured’s cost of epinephrine twin-packs at $60; and
3. Ensure brand-name drug insurance coverage when generic options are unavailable due to supply issues.

May impact group health insurance coverage rates for employers.

2025: Federal 401(k) and IRA Increases

Maura Ann: The SECURE 2.0 Act contained several changes to retirement plans that are being phased in over several years. These rules apply to traditional IRAs, Roth IRAs and 401(k)s; familiarizing yourself with them can help you save more money for retirement and avoid penalties.

Here are six changes impacting IRAs and 401(k)s in 2025:

1. Annual employee deferrals to simple IRAs limit increased by $500 to $16,500 — the catch-up contribution limit for those 50 and over remains the same at $3,500.
2. New catch-up contribution amount increases to allow employees age 50 and older to make additional deposits into their tax-advantaged retirement savings accounts. Now that we are in 2025, there will be an increase in the catch-up contribution limits for participants who have reached ages 60 through 63.
3. New 401(k) plans established on or after December 29, 2022 are required to implement an automatic enrollment feature in 2025 unless an exception applies.
4. If you inherited an IRA from someone who died on or after January 1, 2020, you are required to withdraw all funds in the IRA no later than December 31 of the tenth full calendar year following the death of the individual from whom you inherited the IRA.
5. The IRS delayed the implementation of the final rules governing inherited IRA Required Minimum Distributions until 2025. However, the IRS has provided transitional relief for beneficiaries who did not take Required Minimum Distributions from their inherited IRAs in 2021 through 2024. Starting in 2025, a 25% penalty will be assessed for those who do not take their Required Minimum Distribution.
6. The SECURE 2.0 Act created a searchable database to help people find lost retirement benefits accounts. This “lost and found” database is housed at the Department of Labor.

Potential tax/benefits changes, if any, will likely be presented later in the year and there hasn’t been much chatter about them to date.

2025: Federal Social Security Fairness Act

Maura Ann: On January 5, 2025, President Biden signed the social Security Fairness Act into law. The Act repealed two federal laws–the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The WEP and GPO reduced Social Security payments to many public sector retirees and survivors who received benefits from a public retirement system for employment that did not require contributions to Social Security. By repealing the WEP and GPO, these public sector retirees and survivors’ Social Security benefits will no longer be reduced.

The Social Security Fairness Act applies to Social Security benefits payable after December 2023. The Social Security Administration is preparing for implementation of the law and will publish more information on their website as soon as it is available.

2025: Increase in Federal Minimum Wage for Federal Contractors

Andrew: Effective January 1, 2025, the hourly minimum wage for federal contract workers performing work on or in connection with covered contracts will increase from $17.20 to $17.75/per hour.

2025: FTC Noncompete Ban Update

Andrew: Set to become effective on September 4, 2024, an injunction on the Federal Trade Commission’s ban on noncompete agreements has rendered the rule unenforceable. As of now, the Federal Trade Commission has decided to appeal both the Texas and Florida decisions that the noncompete ban was unlawful. We have yet to hear as to whether any decision has been made.

2025: Vacated Federal Fair Labor Standards Act Overtime Exemption Increases

Andrew: Earlier in 2024, the US Department of Labor issued a final rule to increase the wage threshold overtime exemptions under the Fair Labor Standards Act in multiple steps. However, as of November 15, 2024, the Eastern District of Texas decided to vacate the rule nation-wide, meaning the increase in the overtime threshold scheduled to become effective on January 1, 2025 did not go into effect. Additionally, the court also struck down the July 1, 2024 increase that previously went into effect. Thus, the prior salary threshold of $684 per week, or $35,568 annually remains in effect for 2025.

2025 Conclusion

Andrew: Keep new rules in mind. Not sure what’s going to happen with new administration. Predict new workplace safety standards

2024: Illinois Biometric Information Privacy Act

Madeline: Seeing as though we have some additional time, let’s review a few of the many changes in employment law that occurred in 2024. Effective August 2, 2024, Illinois Biometric Information Privacy Act was amended in two ways: (1) significantly limiting potential damages to the greater of $1,000 for each negligent violation, $5,000 for each intentional or reckless violation, or actual damages; and (2) updating the Act’s definition of “written release” to include an “electronic signature.”

2024: Illinois Freelance Worker Protection Act

Madeline: Effective July 1, 2024, the new Illinois Freelance Worker Protection Act provides protections for independent contractors who provide products or services in Illinois or who work for a hiring entity located in Illinois when the value of that work is equal to or greater than $500 in a 120-day period. Under the law, freelance workers are entitled to all of the following:

1. A written contract (see templates below) that includes:
   1. Name and contact information of both the hiring entity and freelance worker
   2. Itemization of products and services
   3. Rate and method compensation
   4. Date of compensation due
   5. Dates of services to be provided
2. Full payment for the services by the due date in the contract, or if the due date is not specified, within 30 days of completing the services outlined in the contract; and
3. Protection from retaliation and/or other negative action for exercising rights under the FWPA

2024: Federal Joint Employer and Independent Contractors Rule

Andrew: Effective February 26, 2024, the National Labor Relations Board released a new rule providing that an independent business entity (let’s say, Company A) may be deemed a joint employer of another company’s employees (let’s say, Company B) if Company A not only exerts control, but even if it “possesses the authority to control (whether directly, indirectly, or both), or to exercise the power to control … one or more of [Company B’s] employee’s essential terms and conditions of employment. Now it is far more likely for Company A to be deemed a joint employer of Company B’s employees.

2024: Other Illinois Laws Effective January 1, 2024

Madeline: Other laws that were enacted or amended with an effective date of January 1, 2024 include:

1. The NEW Paid Leave for All Workers Act, which requires practically all employers with employees who work in Illinois are required to provide their employees a minimum of 40 hours of PTO per year to take for any reason at all.
2. The NEW Child Extended Bereavement Leave Act, which mandates job-protected, unpaid leave for parents who experience the loss of a child through suicide or homicide
3. The NEW Organ Donor Leave Act, which provides that employees may use up to 10 days of paid leave in any 12-month period to serve as an organ or tissue donor.
4. The Illinois Victims’ Economic Security and Safety Act, which was amended to allow employees to take a total of not more than 2 workweeks (10 workdays) of unpaid leave limited to 3 specific reasons relating to a family or household member who is killed in a crime of violence, which include (1) to attend the funeral (or alternative to a funeral) or wake; (2) to make arrangements necessitated by the death; or (3) to grieve the death.
5. The Illinois Gender Violence Act, which was amended to allow a victim of gender-related violence to sue the person who committed the act of violence and seek damages, which can extend to an employer if the employer (1)(a) fails to investigate complaints or reports of offending conduct; and (b) fails to take remedial measures; or (2) fails to supervise, train or monitor the employee who engaged in the gender-related violence.
6. The State Finance Act, which was amended to modernize the Illinois labor notice and procedure obligations. Three changes were made: (1) employers with 100+ employees should have submitted an application to obtain an Equal Pay Registration Certificate (EPRC) by March 24, 2024 and recertification every 2 years (can no longer submit their most recent EEO-1 report to meet EPRC requirements); (2) for personnel file review requests, all employers must now provide personnel records by email upon employee request; and (3) all employers with employees who do not regularly report to a physical workplace must distribute notices required by the Illinois Minimum Wage Law, the Illinois Equal Pay Act of 2003, the Illinois Wage Payment and Collection Act, and the Illinois Child Labor Law either by email or conspicuous posting on the employer’s website or intranet site.

2024: Chicago Updates

Madeline: We believe it is important to go over a few updates to the laws in the city Chicago. Effective July 1, 2024, two things happened:

First, let’s talk minimum wages. The Chicago Minimum Wage Ordinance applies to any employer with 4 or more employees and, per the ordinance, the minimum wage increases annually. Pursuant to the Ordinance, the Chicago minimum wage increased to $16.20 per hour, with youth workers (those under 18) at $15 per hour. Tipped workers minimum wage increased to $11.02 per hour and $10.20 for youth workers and if the tipped worker’s wages plus tips don’t equal at least the full minimum wage ($16.20 for 18 or older and $15 for under 18), then the employer must make up the difference. Also important to note is that for standard and youth workers, overtime minimum wage remains at time and a half. However, for tipped workers, the overtime minimum wage for standard employees is $19.12 and for youth employees is $17.70.

Second, let’s talk paid time off. Chicago enacted the Paid Sick and Paid Sick and Safe Leave Ordinance, which now requires employers to provide eligible employees 40 hours paid sick leave + 40 hours of paid leave usable for any reason per year (total = 80 hours PTO/year), both of which accrue at a rate of 1 hour of paid sick leave and 1 hour of paid leave for every 35 hours worked. Eligible employees include those employees who work at least 80 hours for the employer within any 120-day period while physically present within the geographic boundaries of the City. Once the threshold is reached, the Employee will remain an eligible employee for the remainder of the time that the Employee works for the Employer. The Ordinance also applies to “all Domestic Workers regardless of whether they work as employees, independent contractors, sole proprietors, or partnerships.”

2024 Conclusion

Andrew: Be aware of both 2024 and 2025 change and look out for more.