Overview of New Laws Affecting Illinois Employers in 2016
Illinois Governor Bruce Rauner has had a busy year enacting new laws and amendments that will affect employers in 2016. Below is a brief overview of new Illinois laws and amendments that will become effective January 1, 2016.
Illinois Equal Pay Act Expanded to Include all Employers
Illinois Governor Bruce Rauner signed House Bill 3619 on August 20, 2015, to expand the Equal Pay Act of 2003 to apply to all employers, rather than employers with four or more employees. The new law, effective January 1, 2016, will prohibit an employer from discriminating against an employee on the basis of sex by paying wages at a rate less than the employer pays to another employee of the opposite sex for the same or substantially similar work. Exceptions under the act include payment based on a seniority system, merit system, a system that measures earnings by quantity or quality of production, or any other differential based on any other factor other than sex or a factor that would constitute unlawful discrimination under the Illinois Human Rights Act. The civil penalties for violation of the law will also increase, ranging $2,500-$5,000 depending on the number of offenses.
Veterans Preference in Private Employment Act
On July 28, 2015, Governor Rauner, signed House Bill 3122 and created the Veterans Preference in Private Employment Act. Under the new law, effective January 1, 2016, Illinois will join 19 other states in allowing employers to voluntarily establish a preference for hiring veterans for as long as there is a publicly posted policy that is applied uniformly for all employment decisions regarding the hiring, promotion or retention of employees. A veteran's preference law is already in effect for public employers. Under the new law, a "veteran" is defined as an individual who meets one or more of the following criteria: (1) has served on active duty with the armed forces of the United States for a period of more than 180 days and was discharged or released from active duty under conditions other than dishonorable; (2) was discharged or released from activity duty with the armed forces of the United States because of a service-connected disability; or (3) is a member of the Illinois National Guard who has never been deployed but separated under conditions other than dishonorable as noted on the individual's NGB-22 discharge form. The purpose of the new law is to reduce unemployment rate for Illinois veterans. There are currently over 800,000 veterans in Illinois.
Minimum Wage Overtime Amendment
The Illinois Minimum Wage Law currently provides that non-exempt employees must be paid time-and-a-half for all hours worked over the 40 hour workweek. On July 10, 2015, Governor Rauner signed legislation (Senate Bill 0038) amending the Illinois Minimum Wage Law as it relates to public employees who are members of a bargaining unit recognized by the Illinois Labor Relations Board. The amendment takes effect January 1, 2016 and provides that the overtime provisions of the new law do not apply to any employee who is a member of a bargaining unit recognized by the Illinois Labor Relations Board and whose union has contractually agreed to an alternate shift schedule as allowed by subsection (b) of Section 7 of the Fair Labor Standards Act of 1938.
Amendment Regarding Medical Marijuana Costs
Illinois has now become the 20th state to pass medical marijuana legislation. Public Act 99-0031 amends the Illinois Compassionate Use of Medical Cannabis Pilot Program and provides that nothing in the Act may be construed to require an employer or a property and casualty insurer to reimburse a person for costs associated with the medical use of cannabis. The amendment takes effect January 1, 2016.
Illinois Secure Choice Savings Program Act
Illinois has become the first state to require private-sector employers to offer their employees retirement benefits. Former Illinois Governor Pat Quinn signed Senate Bill 2758 into law on January 4, 2015. The new law, known as the Illinois Secure Choice Savings Program Act, was implemented June 1, 2015, but the State is not expected to complete enrollment until June 1, 2017. The new law will mandate a retirement savings plan by requiring private employers with 25 or more Illinois employees to offer their employees a state implemented automatic enrollment payroll deduction Individual Retirement Account program known as the "Illinois Secure Choice Savings Program Fund." Private qualified employers must participate in the state of Illinois-organized retirement savings program in the form of an automatic enrollment payroll deduction IRA of 3% of the employee's after-tax compensation. The Act applies to both for-profit and not-for-profit employers, but will only affect employers that do not already offer their employees retirement benefits, such as a 401(k) or Simplified Employee Pension Plan.