Illinois Amends Equal Pay Act — What Employers Need to Know
On July 31, 2019, Governor Pritzker signed into law Public Act 101-0177, which, for the second time this year, amends the Illinois Equal Pay Act of 2003 (“IEPA”).1 The most recent amendments are consistent with trends seen in other jurisdictions (including New York and California) relating to an employer’s ability to inquire regarding an applicant’s wage and salary history and to prevent employees from discussing their pay. Employers must act quickly to comply, as the amendments will be effective on September 29, 2019. Certain key revisions to the IEPA are outlined below.
Wage and Salary History Prohibitions
Under the IEPA amendments, Illinois employers and employment agencies may not:
Screen job applicants based on their current or prior wage or salary histories (including benefits or other compensation) by requiring that such histories satisfy minimum or maximum criteria;
Request or require (from an applicant or his/her current or former employer) an applicant’s wage or salary history as a condition of the applicant (a) being considered (or continuing to be considered) for employment or for an offer of compensation and/or (b) being interviewed; or
Request or require that a job applicant disclose his/her wage or salary history as a condition of employment.
Similarly, an employer may not refuse to hire an applicant, or take adverse action against an employee, for refusing to comply with any wage or salary history inquiry.
Notably, an employer may still provide an applicant with information about the wages and benefits offered, and can discuss with an applicant his/her expectations regarding wages and benefits. Further, if a job applicant voluntarily and without prompting discloses his/her current or prior wage or salary history, the employer will not be found to have violated the IEPA as long as the employer did not consider or rely on the information that was voluntarily provided when determining whether to offer the applicant the job or particular compensation, or when determining future wages, salary, benefits or other compensation.
The IEPA amendments will further prohibit employers from requiring employees to sign a contract or a waiver that prohibits an employee from disclosing, or discussing, information regarding the employee’s wages, salary, benefits or other compensation. Even with this limitation, however, an employer may prohibit human resources employees, supervisors and other employees whose job duties require or allow access to employee wage or salary information from disclosing that information, absent the prior written consent of the employee whose information is sought or requested.
Expanded Scope of Comparators
With limited exceptions, the IEPA currently prohibits an employer from paying wages to an employee at a lesser rate than the rate paid to an employee of the “opposite sex,” and from paying wages to an African-American employee at a lesser rate than the rate paid to a non-African-American employee, where the job at issue requires “equal” skill, effort and responsibility. The IEPA amendments, however, will ease the burden on employees seeking to make an IEPA claim, as they will need to show only that the job at issue requires “substantially similar”—but not “equal” —skill, effort and responsibility.
The 2019 IEPA amendments provide for increased penalties and damages for violations of the law, and applicants and employees have five years to bring a claim. With all of this in mind, employers are encouraged to do the following:
Promptly engage with external head hunters and internal talent acquisition teams to ensure that they understand the law and the limitations it will impose on the recruiting process;
Remove any wage and salary history inquiries from job applications;
Review and revise policies and practices relating to recruiting, interviewing and hiring, and ensure that employees who interview candidates are informed of what they cannot ask regarding pay history, and of how they should handle voluntary disclosures of pay history;
Review and revise policies and agreements which limit an employee’s ability to discuss compensation, including as may be found in confidentiality and restrictive covenant agreements; and
Consider whether conducting gender and/or race based pay equity audits with legal counsel is appropriate in order to evaluate (and correct) potential disparities.
1 The IEPA was amended earlier this year to expand the law's equal pay protections to African Americans.