Employers Must Comply With Key Changes Made to the Requirements of the Illinois Workplace Transparency Act

A recent amendment signed into law on August 15, 2025, will expand the protections and scope of the Illinois Workplace Transparency Act (WTA) in several important ways. The law, originally enacted in 2019, ushered in a number of new regulations and amendments to existing laws with the goal of further preventing harassment and discrimination in the workforce.

Since the law took effect in 2020, restrictions have been in place on an employer’s use of arbitration agreements, confidentiality provisions and agreements, and terms in a settlement or separation agreement. The WTA applied to all contracts entered into, modified, or extended on or after January 1, 2020, the effective date of the Act.

The 2025 amendments will take effect on January 1, 2026. We highlight six key changes that employers should be aware of below:

1. Expanded Definition of Unlawful Employment Practices and Prohibited Contract Terms

The Amendment broadens the scope of prohibited contract terms with employees by expanding the definition of “unlawful employment practice.” Section 1-20 of the WTA currently prohibits any “contract, agreement, clause, covenant, waiver or other document” from prohibiting, preventing, or otherwise restricting a current or former employee (or applicant) from reporting allegations of unlawful conduct to federal, state or local officials for investigation, including but not limited to alleged criminal conduct or unlawful employment practices.

Under the new provisions taking effect, Section 20 prohibits any contract, agreement, clause, etc. from restricting an employee from (1) reporting an allegation of unlawful employment practices or (2) “engaging in concerted activity to address work-related issues.”

Central to Section 1-20’s first prohibition is the definition of unlawful employment practice. The Act’s prior definition of “unlawful employment practice” was limited to any form of unlawful discrimination, harassment or retaliation actionable under the Illinois Huiman Rights Act (IHRA) or Title VII of the Civil Rights Act of 1964 (Title VII), or any other related state or federal rule that is enforced by the Illinois Department of Human Rights (IDHR) or the Equal Employment Opportunity Commission (EEOC).

Under the new language, an unlawful employment practice is any practice made unlawful that is actionable under the IHRA, Title VII “or any other state or federal rule or law governing employment, including those that are enforced by” the IDHR, the Illinois Labor Relations Board, the EEOC, the U.S. Department of Labor, OSHA, and the National Labor Relations Board.

2. Addition and Definition of Concerted Activity

The Amendment adds “concerted activity” as a defined term and creates Section 1-20’s second type of prohibited contract, agreement, clause, etc. tied to this definition, as Section 1-20 now also prohibits any type of contract or provision to restrict an employee’s right to engage in concerted activity.

“Concerted activity” is defined as “activities engaged in for the purpose of collective bargaining or other mutual aid or protection as provided in [the National Labor Relations Act,] 29 U.S.C. 157 et seq., as it existed on January 19, 2025, and the Illinois Education Labor Relations Act, Illinois Public Labor Relations Act, and Labor Dispute Act.”

3. Expansion of Prohibited Unilateral Contract Terms

The Amendment expands the unilateral contract terms prohibited with employees under Section 1-25. This provision currently prohibits any agreement, clause, covenant, or waiver that is a unilateral condition of employment or continued employment that has the purpose or effect of preventing an employee from making truthful statements or disclosures about alleged unlawful employment practices.

That prohibition has now been expanded to include any agreement that has the purpose or effect of preventing an employee from engaging in protected concerted activity. The Act’s prohibition of arbitration or similar agreements is now expanded to include reference to specific terms that are deemed unlawful and void.

Those provisions are: a provision that “purports to shorten the applicable statute of limitation”; a provision that “purports to . . . apply non-Illinois law to an Illinois employee’s claim”; and a provision that “purports to . . . require a venue outside of Illinois to adjudicate an Illinois employee’s claim”

4. Mutual Agreements and Expanded Employee Acknowledgements

The Act continues to provide that “[a]ny agreement, clause, covenant, or waiver that is a mutual condition of employment or continued employment may include provisions that would otherwise be against public policy as a unilateral condition of employment or continued employment” if it meets certain conditions.

Most of the required conditions remain unchanged by the Amendment. However, two additions were made that expand the acknowledgements of the employee or applicant’s rights:

(1) First, the clause or agreement must confirm the individual’s right to “participate in a proceeding related to unlawful employment practices, including any litigation brought by any federal, state, or local government agency or any other person who alleges that the employer has violated any state, federal, or local law, regulation or rule.”

This language revises the pre-amendment Act’s language referencing an employee’s right to “participate in a proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws.”

(2) Second, the clause or agreement must include acknowledgment of an individual’s right to “engage in concerted activity to address work-related issues.”

5. New Requirements for Confidentiality in Separation and Settlement Agreements

For separation or settlement agreements, the Amendment now requires that a confidentiality provision be provided separately from any consideration provided for a general release of claims.

Additionally, though employers are required to document that confidentiality is the employee’s preference, employers are prohibited from unilaterally including a clause in the settlement or separation agreement that says the promise of confidentiality is the employee’s preference.

Lastly, the Amendment adds that employers may not contract for confidentiality regarding future or prospective concerted activity related to workplace conditions.

6. Expansion of Recoverable Damages for Employees

The final expansion we highlight is the expansion of recoverable damages available to a current or former employee or applicant in the event of litigation, either challenging a contract for violation of the Act or defending against an action for breach of a confidentiality provision in violation of the Act.

In such cases, the individual will be able to recover consequential damages, in addition to reasonable attorneys’ fees and costs incurred in such actions.

Conclusion

All of these changes mean that employers will want to familiarize themselves with the expanded requirements and review the impact these changes may have on their organization’s current confidentiality, arbitration, or separation agreements.

The risk of non-compliance on or after January 1, 2026, could invalidate important provisions and increase potential damages in the event of a dispute.