Publication

On March 23, 2021, Illinois Governor JB Pritzker signed a major new piece of legislation addressing equal pay and related issues. The new legislation contains significant changes for Illinois employers under the Illinois Human Rights Act ("IHRA"), Illinois Equal Pay Act ("IEPA"), and Illinois Business Corporation Act. The amendments limit the use of criminal conviction records, impose new reporting and registration requirements for employee demographics and pay, and create new protections for whistleblowers. The following is a high-level summary.

Limitation on Employer Use of Criminal Conviction Records

Effective March 23, 2021, Illinois employers are prohibited from using a criminal conviction – including felony, misdemeanor or other criminal offense, placed on probation, fined, imprisoned, or paroled – as a basis for employment decisions. This includes decisions about whether to hire, promote, change conditions of employment, discipline, and terminate. There are two limited exceptions: (1) where there is a substantial relationship between the conviction and the job; and (2) where the individual’s conviction poses an unreasonable risk to property, the safety or welfare of specific individuals, or the general public.

The law requires employers to consider six factors when determining whether to use a conviction:

1. The length of time since the conviction;
2. The number of convictions appearing on the individual’s conviction record;
3. The nature and severity of the conviction, and its relationship to the safety and security of others;
4. The facts or circumstances surrounding the conviction;
5. The age of the individual at the time of the conviction; and
6. Evidence of rehabilitation efforts.

If an employer intends to use a conviction to make an employment decision, the employer must first engage in an interactive assessment by notifying the individual in writing of its preliminary decision. The notice must identify the disqualifying conviction and the employer’s reasoning for the disqualification, a copy of the conviction history report, and an explanation of the individual’s right to respond within five business days to the notice of the employer’s preliminary decision before it is finalized.

If after considering the individual’s response, the employer still decides to proceed as originally intended, the employer must give the individual a second written notice. The second written notice must include the employer’s reasoning for taking the employment action and inform the individual of the right to file a charge with the Illinois Department of Human Rights if the individual disagrees with the employer’s decision.

In 2015, Illinois enacted a “ban-the-box” law restricting employers from asking about criminal history until after an interview, and the IHRA already prohibits employers from taking action against an applicant or employee based solely on the fact that the individual has been arrested. The most recent legislation furthers the existing law as part of an across-the-board strategy to regulate the use of criminal backgrounds in employment.

New Equal Pay Certification and EEO Reporting Requirements

Employers with more than 100 employees in Illinois are now required to obtain an “equal pay registration certificate” by March 23, 2024, and every two years thereafter, from the Illinois Department of Labor ("IDOL"). To obtain the certificate, employers must submit a filing fee, an equal pay compliance statement, a copy of the most updated EEO-1 report, and report the total wages paid to each employee during the past calendar year. Illinois joins California as the only states requiring the collection of this data.

Employers must certify the following in their compliance statements:

• The employer is in compliance with Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage Act, and the Equal Pay Act of 2003;
   
• The average compensation for its female and minority employees is not consistently below the average compensation, as determined by rule by the U.S. Department of Labor, for its male and non-minority employees within each of the major job categories in the EEO-1 report;
   
• The employer does not restrict employees of one sex to certain job classifications and makes retention and promotion decisions without regard to sex;
   
• Wage and benefit disparities are corrected when identified to ensure compliance with applicable federal and state laws; and
   
• How often wages and benefits are evaluated to ensure compliance with applicable federal and state laws.

Employers that fail to obtain an equal pay certificate, or have their certificates suspended or revoked following an audit, will be assessed a penalty of 1% of the employer’s gross profits.

Notably, IDOL’s issuance of a certificate does not establish compliance with the Equal Pay Act (other than the certification requirement), and will not be a defense against any Equal Pay Act violation found, and will not be a basis for mitigation of damages.

Also, beginning January 1, 2023, Illinois corporations that are required to file a federal EEO-1 with the U.S. Equal Opportunity Commission must now include in their annual report to the State of Illinois information that is substantially similar to information reported under the federal EEO-1 report. In contrast to the federal filing, the Illinois Secretary of State will publish data on the gender, race, and ethnicity of each corporation’s employees on its website.

New Protections for Whistleblowers

The IEPA was also amended to create a private cause of action for whistleblowers. Under the amendment, employers are prohibited from taking any retaliatory action against an employee because the employee does any of the following: (a) discloses or threatens to disclose to a supervisor or to a public body an activity, inaction, policy, or practice implemented by a business that the employee reasonably believes is in violation of a law, rule, or regulation; (b) provides information to or testifies before any public body conducting an investigation, hearing, or inquiry into any violation of a law, rule, or regulation by a nursing home administrator; or (c) assists or participates in a proceeding to enforce the provisions of this IEPA.

An employee’s burden under the new provision is less onerous than with most other retaliation claims. A violation is established where the employee shows the employer engaged in the aforementioned conduct, and the conduct was “a contributing factor” in the retaliatory action. The employer has a defense, however, if it demonstrates by clear and convincing evidence that it would have taken the same unfavorable action in the absence of the conduct.

Remedies for violations include reinstatement of the employee to the same or equivalent position, two times the amount of back pay, interest on back pay, and reasonable costs and attorney’s fees.

Reminder: Annual Sexual Harassment Prevention Training

Unrelated to the most recent round of new Illinois employment legislation, but as a reminder, Illinois employers are required to provide annual sexual harassment prevention training to all employees. More information can be found here.

We recommend that Illinois employers review and update their policies and practices to ensure legal compliance. Gordon & Rees attorneys are available to answer inquiries and provide assistance with these and other workplace issues.