Background

The Illinois Equal Pay Act prohibits employers with four or more employees from paying unequal wages to men and women for doing the same or substantially similar work, except if the wage difference is based upon a seniority system, a merit system, or other factors aside from gender. It also prohibits employers from paying African American employees less than another employee who is not African American for the same work.

Illinois Equal Pay Act Amendments

Pay Equity

To continue towards equal pay for all, Illinois has amended the Illinois Equal Pay Act (the Act), effective September 29, 2019. Previously, the Act required employers to pay all employees with “equal” skill sets and job requirements on an equal basis. The amendment now broadens that definition to require employers to pay similarly for work with a “substantially similar” skillset and job requirements, meaning that employers should ensure that their pay aligns across jobs that, while not identical, may have similar requirements.

The amendments to the Act also increase penalties for violations. Prior to the amendments, employers who violated the act would be required to pay employees the lost wages and attorney fees and costs. Now, employers who are found to violate the Act can find themselves paying the employee’s lost wages, compensatory damages, unspecified “special damages” not in excess of $10,000, and punitive damages. Additionally, employers may also now face civil penalties for violating the Act at a rate of $500 to $5,000 for each employee who was affected. Employers will now have to prove that a pay differential is not based on a protected characteristic and is job related as it relates to the position and is necessary for business reasons.

Ban on Pay History for Job Applicants

The Act will now prohibit employers from using salary information in the application process. Illinois employers will not be allowed to:

  • Screen applicants based on wage or salary history
  • Require an applicant’s prior wages as a condition of being considered for the position for any reason

Employers cannot seek out any salary, benefit, or other compensation history, unless it is a matter of public record or if the applicant is a current employee who is applying for a position with their current employer.

Employers can provide salary information as it relates to the position and have a conversation with the applicant about salary expectations, however, direct questions about what the applicant currently makes or made should not be asked. The Act is not violated if the applicant voluntarily provides their current or past pay information, but employers cannot use or rely on that information when determining whether to move forward with an applicant or in determining future compensation.

Pay Transparency Protections

The new amendments also explicitly protect the right for employees to discuss wages, salaries, benefits and other compensation. Employers also cannot require employees to waive their rights under this amendment. The Act does provide an exemption from this provision for human resource employees and other similar employees who require access to wage and salary information.

Next Steps

Illinois employers should make sure that anyone who is involved in the interview process is aware of these changes and that salary history cannot be requested or asked about. They should also review job applications to ensure that any salary history questions are removed and that any other aspects of the hiring process that may use historical salary information for job applicants is changed accordingly. The amended Act retains the five-year statute of limitations for an individual to file a claim.

Need More Help?

Please contact your Assurance representative with any questions.

Information contained herein is not intended to constitute tax or legal advice and should not be used for purposes of evading or avoiding otherwise applicable regulatory responsibilities as issued by the federal or state government(s) and/or taxes owed under the Internal Revenue Code. You are encouraged to seek advice from your legal or tax advisor based on your circumstances.