Employers Should Be Ready For Equal Pay Act Changes Effective September 30, 2019
August 9, 2019
Illinois employers should be revising their job application forms to remove salary history under a new law, effective September 30, 2019. Public Act 101-177 amends the Illinois Equal Pay Act (820 ILCS 112) to prohibit Illinois employers from asking applicants, employees, or former employees from disclosing wage or salary history. You can ask an applicant to state their salary expectations; however, if an employee voluntarily discloses their pay history, the employer is prohibited from relying upon it in deciding whether to make a job offer or using it in compensation decisions.
There are limited exceptions—if the applicant is a current employee and applying for a position with the current employer, or for government or other employees whose salary history is a matter of public record under the Freedom of Information Act or similar laws.
The stated purpose of the law is to decrease the gender pay gap by preventing the use of historical data to set future compensation. At least thirteen other states have similar laws. In Illinois equal pay is required unless the differentiation is based on seniority, merit, quantity, or quality of production or another factor. The use of other factors is limited in that the factor used cannot be based on sex or a factor that would constitute unlawful discrimination. In addition, other factors are only compliant with the law if they are job-related and consistent with business necessity, and the factor used must account for the differential in pay. Thus, if challenged, the employer will have to be able to demonstrate that the factors the employer uses for compensation meet the Equal Pay standards. As employers with more than 100 employees face the September 30, 2019 deadline to file their EEO-1 forms with the Equal Employment Opportunity Commission, these large employers may want to evaluate their 2017 and 2018 salary differentials for employees who perform similar work to determine whether they meet the Illinois Equal Pay Act standards prior to disclosure. The employer may wish to remedy discrepancies which cannot be justified under Illinois law prior to facing litigation or enforcement as any differential will be highlighted in this EEO-1 disclosure.
An employer cannot require employees to waive their rights under the law. In addition, employees have five years to bring a complaint under the Illinois Equal Pay Act. The law allows for an employee to sue for special damages up to $10,000, compensatory (actual) damages (if above $10,000) and injunctive relief. Employees may also recover attorney’s fees and costs. There are also civil penalties that may be imposed for violations.