What is the Illinois Workplace Transparency Act?
The Illinois Workplace Transparency Act (IWTA), originally enacted August 9, 2019, restricts the use of unilateral agreements in employment contracts, separation agreements, and settlement agreements that limit an employee’s ability to report unlawful discrimination or harassment, requiring arbitration, or waiving related claims. Beginning January 1, 2020, for employers to enforce such claims, they must meet statutory safeguards. The Act also prohibits employers from preventing employees from making truthful statements about unlawful conduct.
The Act was designed to ensure that all parties to a contract, including employees, consultants, and contractors, understand and agree to the mutual promises and considerations within the contract. Its purpose was also to protect these parties who truthfully report alleged unlawful discrimination and harassment or criminal conduct in the workplace by prohibiting nonnegotiable confidentiality obligations, waivers, and mandatory arbitration of allegations of discrimination, harassment or retaliation.
What Are the Recent Changes to the IWTA?
- Expansion of Unlawful Employment Practices
Taking effect June 1, 2026, amendments to the IWTA expand protections for employees in several key ways:
- Broader Definition of Unlawful Employment Practices: the Act now includes practices made unlawful under the Illinois Human Rights Act, Title VII, Illinois Department of Human Rights, as well as other State and federal laws enforced by agencies such as Illinois Department of Labor, Occupational Safety and Health Administration, or National Labor Relations Board. These practices include wage and hour issues, safety violations, and other employment law claims in addition to discrimination, harassment, and retaliation.
- Concerted Activity Protections: employers cannot restrict employees from discussing wages, hours, safety concerns, or union activity.
- Settlement and Termination Agreements: confidentiality clauses remain permissible but only if they are:
- The employee’s voluntary preference;
- Supported by separate consideration;
- In writing;
- Provided with 21-days for the employee’s review;
- Provided with 7-days for the employee’s revocation following execution of the agreement; and
- Not restricting future concerted activity or truthful reporting of unlawful practices.
- Prohibited Unilateral Contract Provisions: employers are prohibited from shortening limitations periods, requiring non-Illinois law, or mandating out-of-state venues for Illinois employees within the contract.
- New Remedies: employees may now seek consequential damages in addition to attorneys’ fees and costs, ultimately increasing potential liability to employers.
Protected Concerted Activity
The amendments also define “concerted activity” protections. In short, employers cannot restrict employees from acting together for mutual aid or protection, such as collective bargaining, union organizing, or discussing workplace conditions.
Examples include:
- Employees discussing or comparing wages, hours, or overtime.
- Employees raising safety concerns with coworkers.
- Employees handing out union materials or signing petitions.
- Employees forming groups to complain about scheduling or workplace policies.
How Should Employers Prepare?
Illinois employers should consider the following steps to ensure compliance before June 1, 2026:
- Update Templates: these new provisions apply to all contracts entered into, modified, or extended on or after June 1, 2026. If you use templates or reference previous contracts, you should revise employment, settlement and termination agreement templates to include the required safeguards for confidentiality provisions and confirm all future agreements comply.
- Train HR and Managers: provide training on employees’ rights to engage in concerted activity, such as discussing wages, hours, and safety concerns.
- Audit Practices: confirm all policies and procedures comply with broader definitions of unlawful employment practices.
Guidance
Illinois employers are advised to reach out to an employment attorney for assistance regarding this guidance. At Reno & Zahm, we are proud to represent individuals and businesses in Northern Illinois for over 100 years. Our professionals regularly counsel clients on a large variety of employment matters, including discrimination matters. Contact us today at (815) 987-4050 to schedule a consultation.
This posting is for informational purposes only and is not intended to be legal advice. As the facts and circumstance of each employer are unique, the information provide herein should not be used or relied upon without first consulting a lawyer