Margaret Gentzen, Partner
Haley Spiewak, Law Clerk
Federal:
One Big Beautiful Bill Act:
The One Big Beautiful Bill Act has a significant number of provisions affecting employers, including the following:
The Paid Family and Medical Leave Tax Credit is now permanent. Beginning 2026, employers may elect a non-refundable credit amount of either: (a) the percentage of wages paid to qualifying employees on family and medical leave; or (b) the percentage of premiums paid or incurred. To be eligible for the credit, employers must offer at least two weeks of paid family medical leave to eligible, full-time employees. Employers need not be on formal Family Medical Leave for the credit to be available, so long as the employee qualifies.
There will be no tax on tips for tax years 2025-2028 for certain employees and self-employed individuals who earn “qualified” tips. “Qualified” tips are tips received by an individual in a job which customarily and regularly receives tips (servers, bartenders, hotel staff, etc) but further guidance is expected to be released.
There will be no overtime tax for tax years 2025-2028. Qualifying individuals receiving overtime compensation will be permitted to deduct that compensation on their federal return, subject to certain limits.
Missouri:
Proposition A Repealed:
On July 10, 2025 Missouri Governor Mike Kehoe signed House Bill 567, repealing Proposition A. As no guidance has been released on the implementation of the repeal, employers may continue to offer employees earned paid sick time after August 28, 2025 but they are no longer required to do so. It is left to employers to decide whether employees will be entitled to the hours they have already accrued; whether they should roll the hours into an existing PTO policy; etc.
It is important to note that a ballot initiative has been filed for the November 2026 election, which would provide a similar paid sick time benefit to Missouri employees. If passed, the new proposed legislation would go into effect on February 1, 2027. Other forms of paid medical leave have been introduced in the Missouri house last session and are anticipated to return.
Proposed Amendments to the Missouri Human Rights Act:
Senate bill 608, if signed into law, would prohibit discrimination based on newly identified protected characteristics: sexual orientation, gender identity, and veteran status. The proposed bill alters the definition of motivating factor. Rather than requiring the employee’s protected classification “actually” played a role, the proposed legislation removes “actually” and states that the protected classification “played a roll.” Thus, effectively lowering the bar that the employee must prove.
Additionally, the proposed legislation would no longer make it mandatory for an employee to file a charge of discrimination as a prerequisite to filing suit. An employee may file a lawsuit as soon as the alleged discrimination or retaliatory treatment occurred.
The bill was first read into the senate on January 22, 2025 and was referred to a committee on March 13, 2025. Currently there has been no further movement in the Missouri senate.
Illinois:
Neonatal Intensive Care Leave Act- Effective June 1, 2026
Employers with 16 or more employees must provide up to 10 days of unpaid leave to all employees while any child is a patient in the neonatal intensive care unit. Employers with 50 or more employees must provide up to 20 days of unpaid leave. NICLA is in addition to the FMLA. The Act creates a separate cause of action for employees who believe their rights have been violated.
Amendments to the Nursing Mothers in the Workplace- Effective January 1, 2026
Employers are now required to compensate employees at their regular rate of compensation for each nursing break taken during the workday, for one year after the child’s birth. Employers may not require the employee to use paid leave during the break time or reduce the employee’s compensation during the break time in any other manner.
Amendments to the Military Leave Act- Effective Immediately
On August 1, 2025 Governor Pritzker signed into law SB0220, amending the previously known “Family Military Leave Act.” Employers with 51 or more employees must provide paid funeral honors detail leave, up to 40 hours in one year, to “qualifying” employees. The funeral honors detail leave is in addition to any relevant paid or unpaid leave.
Employees must provide reasonable advance notice prior to taking the leave. Employers may request documentation to verify the employee’s participation in the funeral honors detail. There is no notice or posting requirement for employers.
Amendments to the Illinois Human Rights Act- Effective January 1, 2026
Fact-finding conferences are no longer mandatory or automatic. Now, FFCs will be voluntary and both sides must opt-in by submitting a written request prior to 90 days after the date the charge was filed.
Additionally, the IDHR may now impose a civil penalty to “vindicate the public interest.” A first-time offense will result in no more than $16,000 penalties. A second violation within five years will result in no more than $42,500 in penalties. Two or more violations will result in no more than $70,000 in penalties.
Amendments to the Workplace Transparency Act- Effective January 1, 2026
The amendments clarify and restrict the scope of prohibited “unilateral conditions” in settlement and employment agreements. Specifically, consideration for confidentiality must be separate from any traditional settlement payment. Employers and employees may not enter into an agreement to shorten the statute of limitations period, apply non-Illinois law to an Illinois employee’s claim, or include a provision that requires a venue outside of Illinois to adjudicate an Illinois employee’s claim.
Amendments to the Employee Blood and Organ Donation Leave Act- Effective January 1, 2026
Employers with 51 or more employees are now required to provide full-time employees with up to one hour of paid leave for blood donations every 56 days. Additionally, full-time and part-time employees may now take up to 10 days of leave in any 12-month period to serve as an organ donor. Previously the statute only provided organ donation leave time for full-time employees. The amendment states that part-time employees must be compensated during the leave, while there is ambiguity as to whether full-time employees must be paid as well.
Amendments to the Victim’s Economic Safety and Security Act- Effective January 1, 2026
Employees may now use company-provided equipment, such as cellphones, to record and document domestic violence, sexual assault, gender violence, or any other crime of violence committed against the employee or a family or household member of the employee. The Act now provides employees with the right to access related files if needed for legal action. Employers must post a notice of right in the workplace.
What now?
Employers should review their handbooks and policies to ensure they are up to date with the newly enacted laws. Fox Smith, LLC will continue to monitor legal developments and keep our clients apprised of any developments. If you have any questions specific to your company, please contact the Fox Smith, LLC Employment Team at 314-588-7000 or mgentzen@foxsmithlaw.com.