Law Adds to Busy Summer as Many Employers Also Prepare EEOC Pay Data Disclosures

On July 31, 2019, Illinois Governor J.B. Pritzker signed into law HB834, amending the Illinois Equal Pay Act in ways that will fundamentally alter hiring practices across the Land of Lincoln. By doing so, Illinois became one of at least 13 states that now restrict employers’ ability to use pay history in hiring and compensation decisions, as part of the effort to chip away at the persistent national gender pay gap.We previously wrote about this law here.

Under the amendments, employers may no longer screen job applicants based on their current or prior wage history, by requiring that the history meet minimums or maximums.The law also bans requests of applicants or employees, or their former employers, to disclose wage or salary history.Employers can still ask applicants to define their pay expectations, but if an applicant volunteers her pay history, the employer is prohibited from relying upon it in deciding whether to offer a job or in making compensation decisions.

In addition, the law is expected to increase pay discrimination suits, by lowering the burden of proof workers face to prove pay discrimination based on gender or race, and in some cases by placing a new, heavier burden on employers to prove that pay disparities between workers of different genders and/or races are not discriminatory. The law also imposes a new ban on requiring workers to “sign a contract or waiver that would prohibit the employee from disclosing or discussing information about the employee’s wages, salary, benefits or other compensation,” with certain narrow exceptions for workers whose jobs afford access to others’ pay information.

Most significantly, the law substantially increases liability for Equal Pay Act violations. Previously, the law allowed workers who proved pay discrimination to recover the amount of any pay differential, plus interest and attorneys’ fees and costs. The amendment adds to the remedies compensatory and punitive damages. Also, employers who violate the new salary history prohibitions can be held liable for “special damages” – up to $10,000.00, plus any additional compensatory damages needed to make the worker whole.

The new law takes effect in 60 days (around the end of September 2019), and applies to all Illinois employers. Employers should therefore consult with their lawyers now to plan for compliance. Steps to consider include:

  • Reviewing with legal counsel current pay structures to identify pay differentials between workers who perform similar work to assess whether they can be justified under the new law. Employers required to file EEO-1 reports should especially take heed of this recommendation, as they face an additional deadline of September 30, 2019 to provide pay data to the EEOC for 2017 and 2018 under “component 2” of the EEO-1 report that could highlight pay disparities and trigger equal pay-related enforcement actions.
  • Training workers responsible for recruiting and hiring on new bans on compensatory history and other requirements and revising job applications and other materials to strike salary history-related questions.

  • Amending policies and agreements to ensure they don’t violate newly expanded prohibitions on preventing employees from sharing compensation information with one another.

The Amendments to the Illinois Equal Pay Act can be found here.

Information on the EEOC’s EEO-1 Pay Data Disclosure rules can be found here.

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Gary Savine is an Illinois employment lawyer and founder of Savine Employment Law, Ltd. in Chicago. Gary regularly advises human resources professionals on recently enacted employment laws.