Illinois: Updates to Disparate Impact Liability and Jury Service Compensability
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APPLIES TO
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EFFECTIVE
JAN 1, 2027 |
QUESTIONS?
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(888) 378-2456
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Quick Look
- Disparate impact liability is codified under the Illinois Human Rights Act, creating an express state-law basis for challenging facially neutral employment practices that disproportionately affect protected groups.
- Illinois’ Jury Act is amended to require employers with more than 25 employees to compensate employees at their regular rate of pay for time spent serving on jury duty.
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Discussion
Illinois Governor JB Pritzker signed two bills into law impacting employer obligations related to discrimination liability and jury duty compensation. Both measures are discussed below.
Disparate Impact Liability. Effective January 1, 2027, SB 3777, titled the Civil Rights Safeguard Act (CRSA), amends the Illinois Human Rights Act (IHRA) to codify disparate impact liability under state law. Under a disparate impact theory, a facially neutral policy or practice may be unlawful if it disproportionately affects members of a protected group, even absent discriminatory intent, unless the employer can satisfy the applicable statutory defense.
While disparate impact liability has long been recognized under Title VII of the Civil Rights Act of 1964, the enactment of the CRSA appears driven, at least in part, by the federal government’s retreat from disparate impact enforcement. Against that backdrop, the CRSA preserves a state-law avenue for challenging employment practices that disproportionately affect protected groups, regardless of whether federal agencies continue to pursue such claims. As a result, employers may see an increase in disparate impact enforcement activity from the Illinois Department of Human Rights (IDHR).
Separately, employers should also note that the CRSA may carry unintended consequences for employers that utilize criminal background screening, as it extends disparate impact protections to individuals with arrest or conviction records. Employers should be prepared to demonstrate that any criminal history screening criteria are job related, consistent with business necessity, and not susceptible to a less discriminatory alternative.
Jury Service Compensability. Effective January 1, 2027, HB 4844 amends Illinois’ Jury Act to require employers with more than 25 employees to compensate employees at their regular rate of pay for time spent serving on jury duty. This represents a significant departure from prior law, which expressly provided that employers were not required to compensate employees for that time. Notably, the amended law does not define certain key terms like “regular rate of pay” and “time serving on jury duty,” which may create uncertainty for employers, absent regulatory interpretation or guidance.
Action Items
- Review employment policies and practices for compliance with state anti-discrimination, harassment, and retaliation requirements.
- Consult with legal counsel on potential disparate impact exposure.
- Evaluate criminal background screening procedures for compliance with CRSA requirements.
- Review and update jury leave and payroll procedures for compliance, as applicable.
- Monitor legislative and administrative guidance for clarification under expanded Jury Act.
- Have appropriate personnel trained on the updated requirements.
Illinois: Amendments to Pay Transparency Rules
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APPLIES TO
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EFFECTIVE
JUN 18, 2026 |
QUESTIONS?
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(888) 378-2456
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Quick Look
- The Illinois Department of Labor adopted comprehensive amendments to the rules implementing the state’s pay transparency law.
- The amendments define “pay scale and benefits,” “benefits,” and “job posting,” and impose new recordkeeping obligations for employers.
- The rules confirm that remote and hybrid workers with ties to Illinois may be covered, and they introduce a much steeper penalty structure for job posting violations.
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Discussion
On June 18, 2026, the Illinois Department of Labor (IDOL) adopted comprehensive amendments to the administrative rules implementing the pay transparency requirements of the Illinois Equal Pay Act of 2003. Since January 1, 2025, employers with 15 or more employees nationwide have been required to disclose pay scale and benefits information in job postings for Illinois-based positions and to notify current employees of promotional opportunities within 14 days of posting them externally.
New Definitions. The 2026 amendments define several key terms:
- “Pay scale and benefits” now means the wage or salary, or wage or salary range, along with a general description of benefits and other compensation, including bonuses, stock options, or other incentives the employer reasonably expects to offer for the position.
- “Benefits” is defined to include health care, retirement benefits, and paid time off, including sick leave, parental leave, and vacation, as well as any other benefit reportable for federal tax purposes, though minor incidental perks are excluded.
- “Job posting” is defined as a written announcement seeking to hire or accept applications for a specific position, which means general recruitment announcements that do not reference a specific role, such as a “help wanted” sign, fall outside the requirement.
Recordkeeping. The amendments also impose new recordkeeping obligations, requiring employers to create and retain records showing the pay scale and benefits included in each job posting, along with records of promotional opportunities communicated to current employees. These records must reflect the posting’s content as it appeared at the time of publication and must be kept for at least five years, or longer if they relate to an ongoing investigation or enforcement action.
Remote and Hybrid Workers. The amendments confirm that the law’s reach extends beyond employees physically based in Illinois. Coverage now includes postings for positions performed at least partly in Illinois, as well as positions performed outside the state but reporting to an Illinois-based supervisor, office, or worksite. To determine whether a remote or hybrid position is covered, the state will weigh several factors, including how much of the work is performed in Illinois compared to elsewhere, whether any Illinois-based work is only temporary or occasional, and whether work performed outside Illinois involves the same duties as work performed in Illinois.
Penalties. The amendments introduce a more aggressive penalty structure for job posting violations. For active postings, a first violation carries a $500 penalty with a 14-day period to correct it, a second violation carries a $2,500 penalty with a seven-day cure period, and a third or subsequent violation carries a $10,000 penalty with no opportunity to cure. Once an employer reaches a third violation, it becomes subject to automatic penalties without any cure period for five years, and that five-year period restarts with any further violation.
Action Items
- Review job postings and update templates for compliance with pay transparency requirements.
- Update recordkeeping practices to retain job posting and promotional opportunity records for the required period.
- Consult with legal counsel on the coverage of certain remote or hybrid roles under Illinois law.
- Have appropriate personnel trained on pay transparency requirements.
Illinois: Third-Party AI Audits and Whistleblower Protections Enacted
As part of the Artificial Intelligence Safety Measures Act (SB 315), effective January 1, 2028, or 90 days after an AI developer first qualifies as a large frontier developer (e.g., AI frontier model developers with collective annual gross revenues of $500 million in a calendar year), large frontier developers must use a third party to conduct annual independent audits of their AI models to assess the safety of such models and whether they pose “catastrophic risk.” This level of risk is defined as a foreseeable and material risk that the frontier model will materially contribute to the death of, or serious injury to, more than 50 people or more than $1 billion in damage to, or loss of, property arising from a single incident involving creation or release of a weapon, the frontier model evading its controls, or engaging in conduct that could result in the crimes of murder, assault, extortion, or theft. In addition, effective January 1, 2027, a frontier developer cannot retaliate against an employee who discloses information based on their reasonable belief that the frontier developer’s activities pose a specific and substantial danger to the public from a catastrophic risk or that the frontier developer has violated the Artificial Intelligence Safety Measures Act. Frontier developers are also required to provide employees with notice of their whistleblower rights under the law.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase
