Another Round Of Illinois Equal Pay Act Amendments – Employment and HR

Another Round Of Illinois Equal Pay Act Amendments – Employment and HR

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Just over three months ago, on March 23, 2021, Illinois Governor
J.B. Pritzker signed Senate Bill 1480 into law, amending the
Illinois Human Rights Act, the Illinois Business Corporation Act of
1983, and the Equal Pay Act of 2003. These amendments rendered
Illinois’ equal pay and compliance laws among the most far
reaching in the nation and included new reporting requirements for
private employers with more than 100 employees. Taft’s
Employment and Labor Relations group previously authored a law
bulletin on the legislation, available here.

On June 25, 2021, Illinois Governor J.B. Pritzker signed Senate
Bill 1847, making further amendments to such laws and clarifying
several ambiguities found in the March 2021 amendments. These
amendments were effective upon enactment. This law bulletin
provides covered businesses with an overview of the newest set of
amendments and explains changes in equal pay compliance
requirements.

March 2021 – First Amendments to Illinois Equal Pay
Act

The March 2021 amendments require private employers with more
than 100 employees in Illinois to obtain an “equal pay
registration certificate” (the Certificate) from the Illinois
Department of Labor (IDOL) by March 23, 2021. To obtain the
Certificate, private employers must pay a fee and file an
application with IDOL with several comprehensive disclosures and
certifications to demonstrate compliance with equal pay laws.

Specifically, the disclosures and certification requirements
call for private employers to disclose demographic and pay data
regarding “the gender, race, and ethnicity” of each of
the corporation’s employees.

To enforce compliance with the amendments, the IDOL is empowered
to deny, suspend, or revoke an employer’s Certificate. But more
alarmingly, the March 2021 amendments required the IDOL to issue a
civil penalty equal to 1% of the business’s “gross
profits” – an undefined term – for noncompliance.

June 2021 – Second Amendments to Illinois Equal Pay
Act

The June 2021 amendments include further substantive additions,
deletions, and clarifications. For instance, the controversial
penalty of 1% of gross profits for non-compliance was removed. The
June 2021 amendments now provide that a covered business may be
subject to a penalty of $10,000 per violation. A summary of the
other relevant aspects of the most current amendments include:

EEO-1 Report Submissions Still
Required

The June 2021 amendments clarify the definition of
“business” to mean: (1) any private employer who has more
than 100 employees in the state of Illinois and (2) is required to
file an Annual Employer Information Report EEO-1 with the Equal
Employment Opportunity Commission. It remains unclear, however,
whether a covered business may have to submit a consolidated report
to include employees outside of Illinois.

Equal Pay Certificate Compliance Deadlines To Be Set
By the IDOL

The June 2021 amendments modified the deadline for initial
certification, which was set at March 23, 2024 for existing
employers. After the change, the certification deadline will be set
by the IDOL for each employer on a date between March 24, 2022 and
March 23, 2024 as follows:

  • The IDOL will “collect contact information” from
    covered businesses. The IDOL will then assign each business a
    deadline by which it must apply for its Certificate.

  • For existing businesses that means the initial application
    deadline will fall on or between March 24, 2022 to March 23, 2024.
    It is unclear what factors might dictate a given application
    deadline such as company size, location, etc.

  • Covered businesses that commence operations after March 23,
    2021 will be assigned a deadline no earlier than Jan. 1, 2024.
    Again, covered businesses must recertify every two years after
    initial certification.

Expansion of Employee Demographic Data
Submission

The March 2021 amendments required employers with more than 100
employees in Illinois to compile a list of all employees, organized
by gender, race, and ethnicity, and report the total wages paid
to each employee during the last calendar year to the
nearest $100.

The June 2021 amendments now require employers to also identify
“the county in which the employee works, the date the employee
started working for the business, [and] any other information the
Department deems necessary to determine if pay equity exists among
employees. . . .” The phrase “any other
information” is vague and undefined, but may be clarified by
IDOL guidance.

Certification of Compliance Now Includes “Other
Relevant Laws”

Under the June 2021 Amendments, employers now must certify
compliance with not only “Title VII of the Civil Rights Act of
1964, the Equal Pay Act of 1963, the Illinois Equal Pay Act, the
Illinois Human Rights Act, and the Equal Wage Act,” but also
with “other relevant laws.” It is not clear what these
“other relevant laws” might encompass. Such ambiguous
language leaves open the question as to employers’ good faith
certification obligations, and whether employers may be subject to
suspension or revocation of the certification for violation of laws
other than Title VII of the Civil Rights Act of 1964, the Equal Pay
Act of 1963, the Illinois Equal Pay Act, the Illinois Human Rights
Act, and the Equal Wage Act.

Expansion of Wage Comparison Factors

The March 2021 amendments require covered businesses to certify
that the “average compensation for its female and minority
employees is not consistently below the average compensation,”
which is determined by the U.S. Department of Labor, when compared
to its male and nonminority employees within each of the major job
categories in the EEO-1 report.

The March 2021 amendments provide a non-exhaustive list of
factors to assess when making this certification including
“length of service, requirements of specific jobs, experience,
skill, effort, responsibility, working conditions of the job, or
other mitigating factors.” The June 2021 amendments add the
following factors to the non-exhaustive list: “education or
training, job location, [and] use of a collective bargaining
agreement.”

Full Deletion of Whistleblower
Protections

The June 2021 amendments delete the “whistleblower
protection” provisions contained in the March 2021
amendments. 

Access to Application Data and
Information

The June 2021 amendments provide further clarification regarding
access to the data submitted by businesses in an application. For
example, any “individually identifiable information”
submitted as part of the application is considered confidential and
is not subject to requests under the Illinois Freedom of
Information Act (FOIA). Aggregate data, though, is not considered
confidential and is non-exempt under FOIA. Notably, however, that
individually identifiable information may be shared between state
agencies – including the Department of Human Rights and the Office
of the Attorney General – for enforcement purposes. 

 Grace Period

The June 2021 amendments provide a 30-day grace period to
correct an inadvertent failure to file an application or to cure
deficiencies in an application for the Certificate.

These are significant changes for Illinois employers. If you
have questions regarding these anticipated changes, please contact
Taft’s Employment and Labor Relations team.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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