SPRINGFIELD – Several new laws take effect in Illinois on Jan. 1, 2026, including regulations on artificial intelligence, eliminating the state’s grocery tax, and more after receiving Gov. JB Pritzker’s signature.
AI Amendments To Human Rights Act Target Employment Discrimination
House Bill 3773 makes it a civil rights violation for employers to use artificial intelligence (AI) to discriminate against employees or potential new hires based on race, gender, age, and ability when it comes to “recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment.”
Under the new law, employers who fail to notify their employees about their use of AI for these purposes also commit a civil rights violation.Employees who believe their civil rights have been violated can file a charge with the Illinois Department of Human Rights, which has the authority to enforce these newamendments under the Illinois Human Rights Act.
Nursing Mothers To Get Paid Breastfeeding Breaks
Another employment-related law taking effect next year marks a major change for working nursing mothers.
Senate Bill 0212, also known as the Nursing Mothers in the Workplace Act, already required employers to provide “reasonable break time” each time an employed nursing mother needs to express breast milk for her infant child for one year after the child’s birth. But until now, the law didn’t require those breaks to be paid.
Starting Jan. 1, 2026, employers must compensate nursing mothers at the employee’s regular rate of pay during these breastfeeding breaks, and cannot require the employee to use paid leave or reduce their compensation in any other way during these breaks.
State-Level 1% Grocery Tax To Be Eliminated
After 35 years, Illinois is repealing a 1% tax on groceries which had been in place since 1990. 100% of the proceeds from this tax went directly to local municipalities, who were given the option to impose their own local grocery taxes at the same rate.
Municipalities had to pass their own ordinances ahead of an Oct. 1, 2025 deadline to start collecting these local 1% grocery taxes by Jan. 1, 2026. Several communities around the Riverbend passed ordinances earlier this year to impose their own 1% grocery taxes, including Alton, Belleville, Bethalto, Edwardsville, Glen Carbon, Jerseyville, and Wood River.
Instead of replacing the state’s expiring grocery tax, the Village of Godfrey voted to impose a 0.75% general sales tax increase which takes effect on Jan. 1, 2026. While trustees later voted to impose a local 1% grocery tax on top of this sales tax hike, that grocery tax ordinance was immediately vetoed by Mayor Mike McCormick, who cited concerns of overtaxing residents. In a tied 3-3 vote at a later meeting, trustees ultimately fell short of overriding the mayor’s veto.
Other Laws And Changes Taking Effect In 2026
Under SB3203, the cost of prescription inhalers, including rescue and controller inhalers, has been capped at $25 each under Illinois health insurance plans beginning on Jan. 1, 2026.
HB3328 amends the Assisted Living and Shared Housing Act by requiring prospective residents of assisted living or shared housing facilities to undergo an assessment for Alzheimer’s and dementia prior to admission using expert-approved or recommended assessment tools.
SB1976, or the “Workers’ Rights and Worker Safety Act,” prevents the State of Illinois from reducing its safety protections for workers any further than the federal standard set in 2025, even if such worker protections are reduced further at the federal level.
HB1616 expands the state’s existing Blood and Organ Donation Leave Law to apply to part-time employees. This requires certain employers to provide part-time workers with paid leave for purposes of organ donation. This law does not apply to private employers with less than 51 employees.
For tax years ending on or after December 31, 2025, Illinois is adopting the “Finnigan” method for combined reporting for unitary businesses, among several other tax changes which may increase tax liabilities for certain multi-state businesses.
