As the new year approaches, prepare your business for some laws going into effect on January 1, 2026. Below are laws that affect small businesses:

Expanded Workplace Transparency Act

New changes to the Workplace Transparency Act will impact how businesses handle employment contracts, separation agreements, and internal investigations. Small businesses should be aware that:

• Confidentiality clauses and separation agreements will face stricter limits
• Employees will have expanded rights to participate in legal proceedings
• Employers may need to update contract templates and internal policies to stay compliant

These changes aim to improve transparency and protect employees, but will require some administrative updates for employers.

New Limits on AI in Hiring

A new state law will add restrictions to how businesses use artificial intelligence (AI) in hiring and employment decisions.

• Employers must disclose when AI tools are used
• The law is intended to prevent discrimination and increase fairness in employment practices
• Businesses using third-party platforms for hiring are encouraged to confirm whether those platforms use AI and ensure they comply with the new requirements.

End of State Grocery Tax

Effective January 1, 2026, Illinois will eliminate its 1 percent grocery sales tax on qualifying food items.

• This change may affect pricing and receipts for businesses that sell grocery products, including markets, delis, and food retailers
• Municipalities may still choose to impose their own grocery tax, so rates could vary depending on location

Employee Leave and Safety-related Changes

Several laws focused on workplace safety and employee rights will also take effect:

• Employees may now have the right to record or report workplace violence using company devices
• If federal workplace safety standards are weakened, Illinois may adopt stronger local protections
• Businesses are encouraged to review workplace safety policies and ensure employees are aware of their rights under the updated laws.

In 2025, the Lincoln Square Ravenswood Chamber of Commerce launched its first-ever Government Advocacy Program. It was a bold step toward giving small businesses in our community a stronger voice in the policy decisions that shape their day-to-day operations. What followed was a year of steady progress, real impact, and growing momentum.

We began by creating our first Legislative Priorities Agenda, which outlined the issues that matter most to our business community. We also formed a Government Advocacy Council, bringing together a cross-section of member businesses to help guide the Chamber’s policy work and responses.

Throughout the year, we brought civic leaders and business owners into the same room through our expanded Legislative Series. We hosted:

• State of the Neighborhood, featuring Alders Andre Vasquez and Matt Martin
• State of the State, co-hosted with the Greater Ravenswood Chamber of Commerce and featuring Treasurer Mike Frerichs, Senator Mike Simmons, and Representative Hoan Huynh
• Our first Federal Taproom Update, where Congressman Mike Quigley joined us at Dovetail Brewery for a beer and a conversation about what is happening in Washington

In terms of policy engagement, the Chamber weighed in on seven pieces of legislation in the Chicago City Council, including proposals related to the head tax, window signage restrictions, and easing barriers for new business openings. At the state level, we took positions on three major bills, including one designed to support unemployed residents who want to become entrepreneurs. We also advocated for funding to support the creation of a Special Service Area in Budlong Woods, helping bring resources to under-supported business corridors.

At the federal level, we added our voice to the conversation on tariff policy, working to highlight the burden that trade regulations can place on small, locally owned businesses.

During state budget season, Ian Tobin, VP and Director of Community Development, traveled to Springfield twice to meet directly with our representatives and share feedback from our members.

As our first year of advocacy comes to a close, we are proud of the foundation we have built. This work is about making sure our small businesses are seen, heard, and considered at every level of government.

We are just getting started. Here's to more impact in 2026.

BEANS & BREWS

Meet your fellow business folks at our networking series – Beans & Brews! We meet on the last Wednesday of every month at The Perfect Cup on Damen Avenue. Space is limited to 20 guests, so be sure to sign up quickly.

• Date: Wednesday, January 28, 2026
• Time: 8:30am - 10:00am
• Admission: $5.00 members, $10.00 General
• RSVP Today