In 2021, the Illinois Equal Pay Act and the Illinois Business Corporation Act were amended to impose new compliance obligations on employers operating within the state. With the first of these obligations—requiring employers to apply for an equal pay registration certificate—recently becoming effective, and the second—requiring disclosure of workplace demographic and pay information—looming, now is a good time for Illinois employers to review and, if necessary, adapt their practices to comply with these changes in the law.
Equal Pay Registration Certificate Requirement
SB 1480 and SB 1847 amended the Illinois Equal Pay Act to require certain private employers to obtain equal pay registration certificates from the Illinois Department of Labor (“DOL”). Employers that are subject to this requirement (detailed below) and transacting business in Illinois must apply for an equal pay registration certificate between March 24, 2022 and March 23, 2024, and must recertify every two years thereafter. The DOL will assign each impacted employer a deadline to submit their application within the initial two-year window. While it is unclear how application deadlines will be assigned, the DOL will provide employers with at least 120 days’ advanced notice of their respective deadlines.
Here are the basics that Illinois employers need to know:
||Private employers that are required to file an EEO-1 report and that have more than 100 employees in Illinois (if they have not already done so, these employers can provide their contact information to the DOL, for purposes of communication related to this obligation, using this link).
An impacted employer must:
1. Pay a $150 filing fee;
2. Submit wage records, including:
A. The employer’s most recently filed EEO-1 Report;
B. A list of employees with the following information for each:
3. Submit an equal pay compliance statement—signed by a corporate officer, legal counsel, or authorized agent—certifying that:
A. The business is in compliance with the Illinois Equal Pay Act (820 ILCS 112), Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e), the Equal Pay Act of 1963 (29 U.S.C. § 206), the Illinois Human Rights Act (775 ILCS 5), and the Equal Wage Act (820 ILCS 110);
B. The average compensation for its female and minority employees is not consistently below the average compensation for its male and non-minority employees within each of the major job categories in the Employer Information Report EEO-1 for which an employee is expected to perform work, taking into account factors such as length of service, requirements of specific jobs, experience, skill, effort, responsibility, working conditions of the job, education or training, job location, use of a collective bargaining agreement, or other mitigating factors;
C. That the business does not restrict employees of one sex to certain job classifications, and makes retention and promotion decisions without regard to sex;
D. That wage and benefit disparities are corrected when identified to ensure compliance with the Acts cited in A, above;
E. How often wage and benefits are evaluated; and
F. The approach the business takes in determining what level of wages and benefits to pay its employees.
||Within 45 days of receiving an application, the DOL will issue an equal pay registration certificate, or a statement of why the application was rejected. If an application is rejected, the employer can revise and re-submit it, or appeal the rejection.
||The DOL may suspend or revoke an equal pay registration certificate if the employer does not make a good faith effort to comply with requirements specified in the law. However, employers may request an administrative hearing on the proposed suspension or revocation of their certificates.
||The DOL must provide technical assistance regarding the equal pay registration certificate requirements to any business requesting it.
Individually identifiable information submitted to the DOL relative to an equal pay registration certificate is confidential and will not be disclosed to the public. However, the DOL may disclose the following:
1. Its decision to issue, not issue, revoke, or suspend an equal pay registration certificate;
2. Anonymized data regarding a particular job classification or title and the pay for that classification; and
3. Data and identifiable information provided to the Illinois Department of Human Rights or the Office of the Attorney General to assist with their enforcement of the Illinois Human Rights Act.
||Falsification or misrepresentation of information on an application submitted to the DOL is a statutory violation and the DOL may pursue suspension or revocation of an equal pay registration certificate or impose civil penalties (up to $10,000) as a result thereof.
The DOL has published FAQs regarding the application process as well as a Compliance Statement template. The Compliance Statement template sheds some light on how employers are expected to determine employee compensation and benefits by listing various methods of performing that calculation. However, ideally, further guidance will be published shedding light on how employers are expected to determine whether the average compensation for its female and minority employees is consistently below the average compensation for its male and non-minority employees.
Workplace Demographic and Pay Disclosure Obligation
SB 1480 also amended the Illinois Business Corporation Act to require certain corporations to disclose workplace demographic information as part of their annual reports starting on January 1, 2023. Corporations are subject to this requirement if they are obligated to file an Employer Information Report EEO-1 with the Equal Employment Opportunity Commission. Impacted corporations will be required to include information that is substantially similar to the employment data reported under Section D of their EEO-1—in a format approved the Illinois Secretary of State—as part of their annual reports.
The Illinois Secretary of State will publish data on the gender, race, and ethnicity of each reporting corporation’s employees on its website.
Illinois employers should assess their readiness to comply with the above-detailed requirements and determine what measures they must implement to comply with these new requirements.
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