e-Alerts

e-Alert – Illinois Amends Equal Pay Laws and Enacts Salary History Ban

By January 13, 2020 No Comments

Background

On July 31, 2019, Illinois signed into law and amended the Illinois Equal Pay Act of 2003 (IEPA). This amendment increases the law’s compensation discrimination protections and prohibits employers from asking job applicants about their salary history. These changes took effect on September 29, 2019.

Summary

The newly amended statute requires employers to equally compensate employees who perform considerably similar work, without regard to sex or race. It also changes the IEPA requirement that employers pay equally for work that requires “equal” skill, effort, and responsibility to “substantially similar” skill, effort, and responsibility. This change broadens and strengthens the statute’s original general provisions. The IEPA does allow for wage differences based on one of the following factors:

  • A seniority system
  • A merit system
  • A system that measures earnings by quantity or quality of production
  • Any factor other than sex or race

Under the amended law, Illinois employers may use any factor other than sex or race only where the wage difference is not based on sex, race, or other protected characteristics; is job-related; is consistent with the organization’s business needs; and accounts for the entire pay gap or wage difference.

This new law still allows employers to pay employees working in the same position a different wage based on their geographic location within the state.

Additionally, the IEPA included a salary history ban. Illinois employers or their agents may not:

  • Screen applicants based on their current or prior wages or salary histories;
  • Request or require wage or salary history from applicants as a condition of employment or being considered for employment;
  • Seek an applicant’s wage or salary history from a current or former employer as a determining factor on how to compensate an applicant unless the salary history is a matter of public record.
    • This restriction does not apply if the applicant is a current employee applying for a position with their current employer.

However, the new law still allows employers to provide an applicant with information about wages, benefits, and compensation or salary offered. Also, they may discuss salary expectations for a position with an applicant.

Next Steps for Employers

  • Review your pay and compensation practices to ensure they comply with the expanded equal pay law.
  • Review and train your managers, HR staff, and any individual in your organization who recruits on the new IEPA requirements and prohibitions.
  • Ensure any hiring documentation or applications do not reference requesting any information on an applicant’s salary history.
  • If you are a Full-Service or Virtual HR client and would like our assistance with conducting a pay equity analysis, please email us.

The People Simplifying HR

For almost twenty years, HR Knowledge has made it our mission to demystify the complex and daunting process of HR management. We do more than just provide the level of service and technology you’d expect from an industry leader.

We combine an unparalleled passion for service with our decades of HR, payroll, and benefits experience to provide our clients with personalized and actionable advice that is second—to—none.

From managed payroll to employee benefits to HR support, we can help your organization thrive, grow, and reduce operating costs — no matter what industry you serve. Whether you’re interested in our Full-Service solution or just need your employee handbook written, HR Knowledge can help you minimize risk while staying on top of compliance regulations.

The bottom line? We’re not just another cloud-based technology company that also does HR, #WeAreHR.

This content is provided with the understanding that HR Knowledge is not rendering legal advice. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable laws in your jurisdiction and consult experienced counsel for legal advice. If you have any questions regarding this content, please contact HR Knowledge at 508.339.1300 or email us.

 

DOWNLOAD PDF