Illinois
Discussion
Illinois: Proposed Rules on AI Use in Employment Decisions are Postponed
On June 2, 2026, the Illinois Department of Human Rights (IDHR) announced it is withdrawing and postponing its proposed rules implementing the notice and recordkeeping requirements for employer use of artificial intelligence in employment decisions under the Illinois Human Rights Act (IHRA). The proposed rules would have clarified when and how employers must notify employees and applicants that AI is being used to influence covered employment decisions, including hiring, promotion, discipline, and termination. The IDHR cited the need for continued collaboration with other state agencies as the reason for the postponement, and a public hearing scheduled for June 10, 2026, has been temporarily postponed. The underlying law, which has been in effect since January 1, 2026, remains in force in the absence of clarifying rules. Employers using AI to assist or facilitate employment-related decisions in Illinois should continue to monitor IDHR’s Legislative Updates webpage for further developments and remain mindful of their existing obligations under the law.
Chicago, IL: Updated Fair Workweek Rules
As of June 1, 2026, the Chicago Office of Labor Standards (OLS) updated the city’s Fair Workweek Rules. There were a number of changes to the requirements, such as: definitions, calculation of employees, notice requirements for schedule posting, records for tipped employees, notice timelines for new employees or employees returning from leave or those with job changes, predictability pay, right to rest consent, and other record requirements. Covered employers should review the changes for necessary implementation.
Chicago, IL: Tip Credit Timeline is Revised
Chicago has delayed its previously scheduled tip credit phase-out and restructured the timeline by employer size. Under a recently passed ordinance, the phase-out schedule is as follows:
- Employers with 21 or more employees:A tip credit of 16% of the minimum wage applies beginning July 2028, reduced to 8% in July 2029, with full phase-out in 2030.
- Employers with 4 to 20 employees:A tip credit of 24% of the minimum wage applies through July 2030, after which it decreases incrementally, with full phase-out in 2033.
As a result, the tip credit will remain available beyond July 1, 2026, and the minimum wage increase for tipped workers previously scheduled for that date will not take effect as planned. Employers should verify that payroll systems reflect the correct tipped employee rates ahead of July 1, 2026.
Chicago, IL: Paid Sick Leave Rules Revised
As of June 1, 2026, the Chicago Paid Leave and Paid Sick and Safe Leave Rules were revised to clarify interpretation of the Ordinance. For example, the rules clarify how to interpret use of paid sick leave for childcare unavailability and discipline for misuse of paid sick leave. It also introduces guidance on joint employer liability, such as when an Employer uses a temporary staffing agency, Lead Agency, professional employer organization, or other entity serving similar functions. It also confirms that when paid leave and/or paid sick leave are combined with PTO or set out in separate leave banks, the policies meant to encompass paid leave and/or paid sick leave must still meet the minimum requirements of the Ordinance. Employers should have appropriate personnel trained on the updates to ensure proper administration of employee leave.
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