Government Affairs Roundup for 4.22.26

Chamber members:

Illinois lawmakers reached the midpoint of the legislative session last week, hitting the self-imposed deadline for each chamber to advance non-budget, non-tax bills to the other chamber.

As expected, it was a busy stretch in Springfield. A number of measures moved forward, including proposals to revise childcare worker background check procedures, a plan to restrict cellphone use in schools, and renewed legislation backed by the Illinois Treasurer that would allow the office to manage an investment fund for nonprofit deposits.

On Thursday, several members of our Government Affairs Committee joined me in Springfield for the Illinois Chamber’s “Lobby Day.” We heard directly from House Speaker Welch, Senate President Harmon, House Republican Leader McCombie, and Senate Republican Leader Curran, along with updates on key issues. We also connected with several local elected officials throughout the day.

Illinois Leaders Grapple with Tight Budget as Session Nears End
With the General Assembly’s spring session entering its final stretch, Illinois legislative leaders are zeroing in on one dominant issue: the state budget. Speaking Thursday at an Illinois Chamber of Commerce event in Springfield, leaders from both parties agreed that affordability is a pressing concern—but remain divided on how to address it.

Democrats, led by Don Harmon, are focused on passing a balanced budget by the end of May, even as uncertainty from Washington complicates the process. Harmon warned that shifting federal policies could significantly impact state finances, estimating potential federal cuts could total $61 billion over the next decade if fully implemented. Despite the challenges, he expressed confidence in Illinois’ long-term outlook.

Republicans, meanwhile, emphasized the need to control spending and reduce tax burdens. Tony McCombie argued that businesses are facing an unpredictable environment shaped by taxes, regulations, and workforce concerns. She criticized several Democratic-backed proposals as burdensome, saying they risk making it harder for employers to operate and hire in the state.

McCombie pointed to workplace-related proposals—such as temperature regulations, a shorter workweek, and expanded worker accommodations—as examples of policies she believes could hinder business operations. She stressed the need for a more stable and business-friendly climate.

In the Senate, John Curran said Republicans are focused both on advancing their own agenda and refining Democratic legislation. He highlighted past efforts to block a graduated income tax as a key example of pro-business policy and cautioned against last-minute pushes for new revenue during budget negotiations.

As lawmakers head toward adjournment, the central tension remains how to balance fiscal responsibility with competing visions for economic growth and affordability in Illinois.

Bills of Note

Childcare worker background checks
The Illinois House passed legislation this week that takes another step in transferring authority over early childhood education and services to the new Department of Early Childhood.
House Bill 5099 would transfer the responsibility for conducting criminal background checks for childcare workers to the new agency from the Department of Children and Family Services, beginning in 2027.

Governor Pritzker called for creation of the new agency in 2024 to consolidate a vast array of programs and services currently spread across several agencies under one roof. Those range from managing a nearly $750 million block grant program for preschools around the state to the licensing and regulation of childcare facilities and workers.

The new agency is scheduled to become fully operational in the upcoming fiscal year, which begins July 1. Its budget, still being negotiated in the General Assembly, is expected to total $4.4 billion from all funds, including $2 billion in general revenue funds. Most of that represents money currently allocated to other agencies.

Many lawmakers have been especially focused on the issue of background checks, saying they frequently hear from constituents who complain about the time it takes to complete them. But Rep. Joyce Mason, D-Gurnee, the bill’s lead sponsor, said she’s optimistic the process will improve under the new agency.

“Under the new system, background checks will stay with the individual rather than with the center or location, so that will allow them to move from location to location, or even employer to employer,” she said. “It will also allow them to do background checks in advance of getting a position, so their background check can be ready by the time they’re hired, rather than then waiting a month before their background check goes through and they can work.”

The bill passed unanimously out of the House. It now awaits action by the Senate before being sent to Pritzker’s desk for his signature.

Construction bathrooms
Senate Bill 3465 would require construction sites with 10 or more workers and a worker who menstruates to have a separate bathroom on site for the woman to use. Menstrual hygiene products would also have to be available for free. Accommodation would also have to be available for lactation.

“Women and anyone who menstruates have a right to care for their bodies in a dignified and sanitary way,” bill sponsor Sen. Graciela Guzmán, D-Chicago, said in a statement. “Whether in the office or on the job site, we need common sense accommodations for those who menstruate and those who are lactating.”

The bill passed the Senate 37-14 with Republicans arguing the bill would raise already high construction costs. It now moves to the House.

Cell Phone Ban
The Illinois House on Thursday approved the latest version of a bill that would require school boards to prohibit public school students from using their cellphones in the classroom.

Senate Bill 2427, sponsored by Rep. Michelle Mussman, D-Schaumburg, passed 102-3, with one present vote. It would require Illinois school districts to adopt policies by the 2027-28 school year banning the use of wireless communication devices like cellphones, tablets, laptops and gaming devices during school time.

“The research is clear: This constant source of distraction is lowering their academic progress, increasing anxiety, depression and cyber bullying, and inhibiting face-to-face communication at a critical time when youth are developing their social skills,” Mussman said.

An earlier version passed the Senate last year, but the process “was slowed down to allow more time for thoughtful discussion,” Mussman said, which resulted in “a stronger bill.”

Under the new language, the prohibition would be bell-to-bell for elementary and middle school students, but the legislation leaves discretion for school districts to allow high school students to use their devices during lunch and breaks.

The bill also includes carveouts for students with medical needs, who are caregivers for family members, and who need their phone for English translation services. School officials can also permit device use if it’s for educational purposes.

Because the House amended the bill, it will need another vote in the Senate. Gov. JB Pritzker has been pushing for such a ban for two years.

Nonprofit investment fund
The House and Senate both passed versions of a bill to authorize the state treasurer to set up and operate an investment fund that would manage the deposits of nonprofit corporations.

The idea is an initiative of State Treasurer Michael Frerichs, who has said the fund would offer higher rates of return than banks offer through standard checking or savings accounts and greater liquidity than long-term investment funds.

Lawmakers passed similar legislation in 2025, but Pritzker vetoed it, saying such a fund could be used to benefit extremist groups that organize as nonprofit corporations.

The two bills moving through the General Assembly this year — House Bill 5045 and Senate Bill 2968 — contain language that excludes organizations that are barred from receiving state or federal contracts or grants. The bills also limit participation to groups organized for specific purposes such as labor organizations, legal aid services, food pantries, neighborhood development, affordable housing or education.

Even with those changes, the bills drew opposition from the banking industry, which views the program as a form of government competition with private business. But supporters of the bill argued it would fill a need that the banking industry is not currently meeting.

“Some of these banks will not even provide loans, let alone investment opportunities, to these small entities because they just don’t have enough money for them to where it would make sense,” Rita Mayfield, D-Gurnee, the bill’s chief House sponsor, said during floor debate.
The House bill passed 69-32, with one member voting “present.” The Senate version passed 41-16.

Each bill now goes to the other chamber for consideration.

Bereavement leave
A bill from Rep. Maurice West, D-Rockford, seeks to extend the type and length of bereavement leave for all employees.

House Bill 5208 would give employees at businesses with less than 50 employees the right to up to five days of unpaid bereavement leave within 12 months of the death of an immediate family member or a pregnancy or adoption-related event. Individuals who work for employers of more than 50 people are entitled to take up to 10 days.

The bill also removes a provision requiring employees to provide documentation of the loss, although employers may still ask for it. It also adds a provision for leave after the loss of a child — in that event, employers of less than 50 people are to give up to three work weeks; 50 to 250 employees up to six weeks; and more than 250 up to 12 weeks.

Finally, the bill would allow all employees up to three days of unpaid leave to make arrangements for or to attend the funeral of any person.

The bill faced scrutiny from business organizations like the National Federation of Independent Business and the Illinois Chamber of Commerce, who were concerned about the fiscal impact, particularly to small businesses.

It passed 80-26 along party lines and will now head to the Senate.

Illinois Lawmakers Revisit Millionaire Tax
Illinois lawmakers are once again considering a tax on high-income earners as they search for ways to address budget pressures and provide property tax relief. The proposal comes as the spring legislative session enters its final weeks, setting up a familiar and politically sensitive debate.

The plan, backed by House Speaker Chris Welch and state Rep. La Shawn Ford, would add a 3% surcharge on income above $1 million—raising the effective rate from 4.95% to 7.95%. Supporters say the measure could generate billions in new revenue, with estimates ranging from $2.2 billion based on recent tax data to more than $4 billion annually by the end of the decade. The revenue would be split between property tax relief and increased funding for public schools.

Governor Pritzker has expressed support for the concept but is leaving it to lawmakers to decide whether to advance the proposal to voters. Because the change would amend the state constitution, it requires a three-fifths majority in the General Assembly before it could appear on the November ballot.

Backers argue the tax is a targeted way to ease the burden on working families. Ford called it “the best relief for families,” while former Gov. Pat Quinn has urged Democrats to move forward, framing the proposal as a key step toward affordability.

Opposition, however, remains strong, particularly from business groups. Critics argue the tax would extend beyond wealthy individuals to thousands of small businesses structured as pass-through entities, such as S-corporations and partnerships, whose income is taxed at the individual level. Industry leaders warn the higher rate could create uncertainty and discourage investment.

Skeptics also raise concerns about how the revenue would be used. Some lawmakers note the proposal does not lock in spending details, leaving future legislatures to decide how funds are allocated. Others caution that setting a $1 million threshold in the state constitution could eventually capture more taxpayers over time if it is not adjusted for inflation.

The debate is also shaped by recent history. A similar effort to change Illinois’ tax structure failed in 2020 after a costly campaign that drew national attention. That outcome continues to weigh on lawmakers, with some Democrats hesitant to revisit a politically risky issue.

Still, the proposal is advancing. The constitutional amendment cleared a House committee on a partisan vote and now heads to the full chamber. Lawmakers face a May 3 deadline to approve it with a three-fifths majority, which would send the question to voters in November.

With time running short and divisions clear, Illinois leaders are once again confronting a high-stakes question: whether to pursue a major tax change in the name of affordability—or avoid another contentious fight.

Redistricting Constitutional Amendment Proposal
An amendment introduced by House Speaker Chris Welch would revise Illinois’ constitutional rules for drawing legislative districts. The proposal establishes a prioritized list of criteria lawmakers must follow:

• Districts must be substantially equal in population;
• Districts must ensure no citizen is denied an equal opportunity to participate in the political process or elect representatives of their choice based on race;
• Districts should, where practical, create racial coalition or influence districts;
• Districts must be contiguous; and
• Districts should be compact to the extent practicable.

Current constitutional language requires districts to be compact, contiguous, and substantially equal in population, but it does not rank those criteria or indicate that one takes precedence over another. The specific motivation behind the amendment remains unclear. A spokesperson for Welch said additional details would be provided at a later time.

House Republicans believe the proposal is a response to a lawsuit they filed last year challenging the state’s legislative maps. The Illinois Supreme Court ultimately dismissed the case as untimely. The lawsuit argued that dozens of districts failed to meet compactness standards based on prior court precedent.

“We wouldn’t be too late again and they know it,” said Dan Ugaste. “We pointed out flaws in their maps, and they’d lose this time—so now they’re trying to change the system.”

Lawmakers Weigh How to Regulate AI as Technology Rapidly Expands
As artificial intelligence continues to evolve at a rapid pace, Illinois lawmakers are stepping up efforts to determine how—and how much—the technology should be regulated. While there is broad agreement that safeguards are needed, legislators and industry leaders remain divided on the best path forward.

In recent weeks, committees in both chambers of the Illinois General Assembly have reviewed dozens of proposals addressing AI’s impact on consumer protection, privacy, education, and data infrastructure. The Illinois Senate alone held two subject-matter hearings in early April to examine nearly 50 bills related to the issue.

Lawmakers say the urgency stems from concerns that existing laws may not fully address the risks AI poses—particularly for consumers and minors. Mary Edly-Allen pointed to the rise of social media as a cautionary example of what can happen when regulation lags behind innovation. “If we got social media wrong, and we did, we cannot afford to get AI wrong,” she said.

At the same time, legislators emphasized they do not want to stifle innovation. Senator Sue Rezin said the goal is to strike a balance by establishing guardrails—especially around tools like chatbots that could harm users if left unchecked. Concerns include misleading information, liability protections for companies, and the potential impact on younger users.

Industry groups, however, are urging caution. Representatives from organizations like TechNet warned that a patchwork of state-level regulations could create compliance challenges for companies operating across multiple states. They argue that federal oversight would provide more consistency and allow businesses to innovate without navigating conflicting rules. That view aligns with a recent executive stance from the White House favoring limited regulations to encourage technological growth.

Some advocates have suggested Illinois look to other states for guidance to avoid becoming an outlier. “Our core concern is creating a patchwork environment,” said TechNet’s Jarrett Catlin, noting the importance of clear, flexible standards rather than rigid mandates.

Illinois already has some laws that apply to AI, including regulations tied to image manipulation, intellectual property, and biometric data under the Biometric Information Privacy Act. According to Illinois Chamber of Commerce, broader legal frameworks can also be used to hold bad actors accountable.

Legal experts say current tools like tort law—which allows individuals to sue for harm—are beginning to be used in cases involving AI systems. However, many argue these frameworks are not sufficient as the technology becomes more advanced and widespread.

Lawmakers echoed those concerns during hearings, particularly around whether companies should be held liable for harm caused by AI-generated content. Rezin argued that corporations should not be able to avoid responsibility when their systems provide harmful or misleading information.

At the same time, implementing new laws has proven challenging. A 2024 measure restricting the use of AI in hiring decisions—intended to prevent discrimination—has yet to be fully implemented due to delays in rulemaking, highlighting the difficulty of regulating emerging technology.

The debate is also shaped by AI’s growing role in the economy. Businesses of all sizes are increasingly using AI for tasks ranging from marketing and data analysis to cybersecurity and supply chain management. For many small and mid-sized companies, the technology offers a way to compete more effectively with limited resources.

Workforce leaders stress that while AI can enhance productivity, it should complement—not replace—human workers. Society for Human Resource Management emphasized the need for training and workforce development to ensure employees can adapt to more technical roles alongside AI tools.

Industry groups and advocacy organizations have also ramped up their presence in Springfield, underscoring the high stakes. Illinois is now among a growing number of states exploring AI regulation, even as national policy remains unsettled.

Despite the flurry of proposals, most AI-related bills are still in early stages, and negotiations between lawmakers and industry stakeholders are ongoing. The broader question—whether regulation should be led by states or the federal government—remains unresolved.

With competing priorities and significant uncertainty, Illinois lawmakers face a complex challenge: crafting policies that protect consumers without slowing innovation in one of the fastest-growing sectors of the economy.

Illinois House Advances Expanded “Megaprojects” Bill with Broader Economic Focus
Illinois House leaders have introduced a revised version of a sweeping “megaprojects” bill aimed at supporting large-scale developments across the state—not just a potential new stadium for the Chicago Bears.

While the Bears’ proposed move to Arlington Heights remains a high-profile example, lawmakers say the updated legislation is designed to apply more broadly to major projects that could drive economic growth, redevelopment, and infrastructure investment statewide.

The proposal is still evolving. Lawmakers in the House have reviewed the new language, but the Illinois Senate and Governor JB Pritzker have yet to fully weigh in. The governor’s office said it is currently reviewing the draft.

At its core, the legislation creates a framework for “megaproject” developers to negotiate payments in lieu of taxes (PILOTs) with local taxing bodies. These agreements would allow developers to make structured payments instead of traditional property taxes—offering predictability for large projects while still generating revenue for communities.

The revised proposal adds new safeguards and public benefits:

• Property tax relief: Half of PILOT revenue would go toward property tax relief. Of that portion, 60% would fund rebates for local homeowners, while 40% would go into the state’s property tax relief fund.
• Sunset provision: The program would expire after five years, giving lawmakers a chance to evaluate its effectiveness.
• Accountability: Municipalities using PILOT agreements would be required to submit impact reports to the state every five years.
• Data center exclusion: The bill explicitly bars data centers from using the PILOT structure, reflecting concerns about energy demand and costs.

Lawmakers also removed earlier language that raised concerns about shifting tax burdens onto nearby residents and businesses.

State Rep. Kam Buckner, the lead House negotiator, said the changes were aimed at balancing developer incentives with protections for taxpayers. “If we’re going to provide certainty for developers, we also need to provide relief for homeowners,” he said.

The updated bill expands beyond stadium development to support a range of large-scale projects, particularly those tied to infrastructure and urban redevelopment.

Among the potential beneficiaries:

• Rail yard redevelopment projects, including the proposed One Central near Soldier Field
• Redevelopment of Amtrak 14th Street Rail Yard, a site being explored for major mixed-use development
• Springfield convention center expansion, along with a connected hotel project aimed at boosting tourism and events in the capital city

Supporters say these projects could generate jobs, attract investment, and modernize key areas of the state.

The proposal is designed in part to win over skeptical lawmakers, particularly Democrats concerned about local tax impacts and long-term fiscal consequences. Some Chicago-area legislators have also been cautious about policies that could encourage the Bears to leave Soldier Field, which still carries significant public debt from past renovations.

Still, early reactions suggest the revised bill is gaining traction. State Rep. Will Guzzardi called the latest version a “thoughtful” improvement that addresses prior concerns.

For now, the bill’s future remains uncertain. It must pass the House, clear the Senate when lawmakers return later this month, and ultimately secure the governor’s approval.

As negotiations continue, the broader goal is clear: create a statewide tool to attract and manage large-scale developments—while ensuring communities see tangible benefits.

Governor Pritzker Announces Over 60 Tourism Grant Program Awards
$4.85 million in grant funding awarded through Tourism Attractions, Tourism Marketing Partnership, and Tourism Private Sector Grant Programs 
Governor JB Pritzker and the Illinois Department of Commerce and Economic Opportunity (DCEO) announced more than $4.85 million in grant funding has been awarded to 66 grantees through three grant programs – the Tourism Attractions Grant Program ($2 million), Tourism Marketing Partnership Grant Program ($2.25 million), and Tourism Private Sector Grant Program ($598,900) – as part of the State’s efforts to build upon the record-breaking tourism industry and welcome more visitors to Illinois.

“Our tourism industry supports jobs and local economies, and Illinois is a top destination for visitors across the globe,” said Governor JB Pritzker. “These investments will allow communities across Illinois to expand their events and festivals, promote one-of-a-kind destinations, and draw visitors from near and far to our great state.”

Tourism Attractions Grant Program 
The Tourism Attractions Grant Program will provide funding for the development or improvement of tourism attractions in Illinois, such as museums, recreation areas, amusement parks, and more. The goal of the program is to provide assistance for projects that increase the economic impact of tourism throughout Illinois by increasing visitation rates, boosting hotel occupancy, increasing local hotel and sales tax revenue, and more. The full list of this round’s grant recipients can be found here.

“Illinois’ tourism industry is booming thanks to the State’s continued investments in promoting our great state and everything we have to offer,” said DCEO Director Kristin Richards. “Through DCEO’s tourism grant funding opportunities, visitors from near and far will be drawn to Illinois while our communities benefit from economic development throughout the state.”

Tourism Marketing Partnership Grant Program 
Through the Tourism Marketing Partnership Grant Program, DCEO will provide matching grants to assist in the promotion of tourism attractions, destinations, and events in Illinois. Grant funding will help tourism partners market their attractions and events to increase visitation by both business and leisure travelers in order to increase overnight stays in Illinois. The full list of this round’s grant recipients can be found here.

“Visitors are flocking to Illinois in record numbers to see hidden gems and world-renowned destinations,” said Senator Doris Turner (Springfield). “Thanks to the State’s tourism grant programs, communities will be able to further promote events, improve attractions, and develop new and enhanced festivals across Illinois.”

Tourism Private Sector Grant Program 
The Tourism Private Sector Grant Program was created to attract, host and develop new or enhanced events and festivals across Illinois. This funding will support new, expanded, or enhanced events and festivals with costs such as advertising and marketing, transportation, building or equipment rental, receptions and banquets, registration, and entertainment. The full list of this round’s grant recipients can be found here.

“Illinois’ tourism grant funding programs are keeping our state on the map as a premier destination,” said Leader Jay Hoffman (Swansea). “The State of Illinois’ $4 million investment will boost tourism and have a direct impact on the communities that benefit from a greater number of visitors, additional hotel stays, and more.”

The State of Illinois continues to prioritize its tourism industry as millions of visitors spend billions of dollars annually across Illinois, boosting economic development and supporting jobs in the industry. Illinois reached its highest-ever hotel revenue figures in FY25 with $367 million – a 14% increase over the previous record set in FY24. Additionally, Illinois welcomed 113 million visitors who spent $48.5 billion in 2024 – representing 500,000 additional travelers spending $1.3 billion more than calendar year 2023.

“Tourism is a powerful economic driver for communities across Illinois, and we appreciate the State’s continued commitment to investing in this critical industry,” said Brittany Henry, Chair of the Illinois Destinations Association. “These grant programs provide destinations with the tools they need to enhance experiences, grow visitation, and deliver meaningful economic impact in communities of all sizes across our state, while also supporting the small businesses and attractions that are the backbone of our local economies.”

The success of Illinois’ tourism sector is due to its commitment to supporting the industry as well as the Illinois Office of Tourism’s award-winning “Middle of Everything” campaign. Since it launched in 2022, the campaign has contributed to an additional 2.4 million trips equaling more than an additional $1 billion spent in Illinois hotels, restaurants, small businesses, and attractions, according to data from Longwoods International. Additionally, every $1 spent on the campaign equated to $75 in visitor spending while generating $7 in state and local tax revenue for every dollar spent – an enormous return on investment.

SBA Offers Disaster Relief to Illinois Businesses, Private Nonprofits and Residents Affected by Severe Storm and Tornado
U.S. Small Business Administration (SBA) announced the availability of low interest federal disaster loans for Illinois businesses, private nonprofits, and residents affected by severe storm and tornado occurring on March 10. The SBA issued a disaster declaration in response to a request received from Governor J.B. Pritzker on April 7.

The declaration covers the Illinois counties of Ford, Grundy, Iroquois, Kankakee, Livingston, and Will, as well as the Indiana counties of Lake and Newton which are eligible for both Physical Damage Loans and Economic Injury Disaster Loans (EIDLs) from the SBA.

Businesses and private nonprofits are eligible to apply for business physical disaster loans and may borrow up to $2 million to repair or replace disaster-damaged or destroyed real estate, machinery and equipment, inventory, and other business assets.

Homeowners and renters are eligible to apply for home and personal property loans and may borrow up to $100,000 to replace or repair personal property, such as clothing, furniture, cars, and appliances. Homeowners may apply for up to $500,000 to replace or repair their primary residence.

Applicants may also be eligible for a loan increase of up to 20% of their verified physical damage for mitigation purposes. Eligible mitigation improvements may include strengthening structures to protect against high wind damage, upgrading to wind rated garage doors, and installing a safe room or storm shelter to help protect property and occupants from future damage.

“When disasters strike, SBA’s Disaster Loan Outreach Centers play a vital role in helping small businesses and their communities recover,” said Chris Stallings, associate administrator of the Office of Disaster Recovery and Resilience at the SBA. “At these centers, SBA specialists assist business owners and residents with disaster loan applications and provide information on the full range of recovery programs available.”

SBA’s EIDL program is available to small businesses, small agricultural cooperatives, and private nonprofit (PNP) organizations with financial losses directly related to the disaster. The SBA is unable to provide disaster loans to agricultural producers, farmers, or ranchers, except for small aquaculture enterprises.

EIDLs are for working capital needs caused by the disaster and are available even if the business did not suffer any physical damage. They may be used to pay fixed debts, payroll, accounts payable, and other bills which could not be paid due to the disaster. Interest rates are as low as 4% for businesses, 3.625% for PNPs, and 2.875% for homeowners and renters, with terms up to 30 years.

Interest does not begin to accrue, and payments are not due, until 12 months from the date of the first loan disbursement. The SBA sets loan amounts and terms, based on each applicant’s financial condition.

Beginning Friday, April 10, SBA customer service representatives will be at the Disaster Loan Outreach Center in the primary county of Kankakee to answer questions about SBA’s disaster loan program, explain the application process and help individuals complete their application. Walk-ins are welcome, but you can schedule an in-person appointment in advance at appointment.sba.gov.

To apply online, visit sba.gov/disaster. Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information on SBA disaster assistance. For people who are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.

The filing deadline to return applications for physical property damage is June 8. The deadline to return economic injury applications is Jan. 11, 2027.

IDES Update to Employer Contribution Payments
The Illinois Department of Employment Security (IDES) is providing this notice due to a change in the Illinois Administrative Code.  Beginning on July 1, 2026, employer contribution payments to a worker’s 401(k) plan made on and after that date are no longer considered to be “wages” for purposes of the Illinois Unemployment Insurance Act.  Therefore, these payments should not be included when reporting the wages paid to workers to IDES after July 1, 2026.  Employee contributions to their 401(k) plan will continue to be considered “wages.”

Any employer contribution payments to a worker’s 401(k) plan made prior to July 1, 2026, should continue to be included as wages when reporting to IDES.

For reference, the section of the Illinois Administrative Code that changed is located here.  This change was made to be consistent with the way that the Internal Revenue Service now treats employer contribution payments to a worker’s 401(k) plan.

Please note that this change only applies to employer contribution payments to workers’ 401(k) plans and not other plans.

Please contact IDES at (800) 247-4984 with any questions or review the Illinois Administrative Code.

Stay well,

Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct