Employment Law

Amendment to the Illinois Equal Pay Act featured image

Amendment to the Illinois Equal Pay Act

The Illinois Equal Pay Act (“IEPA”) prohibits employers from discriminating between employees on the basis of sex with respect to the payment of wages where the employees perform the same or substantially similar work and have a similar experience, skill, et cetera. On March 23, 2021, Governor JB Pritzker signed Senate Bill 1480 into law, which amends the IEPA. The new bill requires employers to obtain an equal pay certificate and sets forth certain reporting requirements for employers as well. Consult with an experienced Illinois employment attorney to help you navigate the nuances of this new IEPA amendment.

What does SB 1480 require?

The bill requires all private employers with 100 or more Illinois-based employees to obtain an equal pay registration certificate within three years of the Act’s effective date of this Act, and requires such employers to recertify every two years thereafter. To obtain the required certification, employers must pay a $150.00 filing fee and submit an equal pay compliance statement to the Illinois Department of Labor and a completed EEO-1 document (if required to file EEO-1 with the Equal Employment Opportunity Commission).

Additionally, employers must submit a list of all employees, separated by gender, race, and ethnicity categories, and report all total wages paid to each employee during the past calendar year as defined by the Illinois Wage Payment and Collection Act.

The compliance statement, which must be signed by a corporate officer, legal counsel, or authorized agent of the employer, must indicate the following:

  1. that the business is in compliance with Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Illinois Human Rights Act, the Equal Wage Act, and the Equal Pay Act of 2003;
  2. that 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 EEO-1, considering factors such as length of service, requirements of specific jobs, experience, skill, responsibility, et cetera;
  3. that the business “does not restrict employees of one sex to certain job classifications and makes retention and promotion decisions without regard to sex;”
  4. that wage and benefit disparities are corrected when identified to ensure compliance with the Acts cited in section (a), above;
  5. how often wages and benefits are evaluated to ensure compliance; and
  6. disclose what approach the business utilizes in setting compensation and benefits.

What happens when the application is filed?

Once an employer submits the application for the equal pay registration certificate, the Director of Labor then has 45 days to either issue the certificate or notify the employer that its application was rejected. An employer’s application will be rejected only if it fails to comply with the requirements set forth in the compliance statement. However, even if the certificate is issued, it may be revoked or suspended if the employer violates the Act or fails to comply with the above-mentioned requirements.

The Act allows for the Illinois Department of Labor to audit the employer’s compliance with the requirements set forth in the Act. The audit may include interviewing employees, collecting sworn statements, deposing witnesses, and obtaining and reviewing all records relevant to the audit. Upon request, the employer must furnish a sworn statement attesting to the accuracy of its records.

If any employer fails to obtain an equal pay registration, or has its certification suspended or revoked following an investigation, the Illinois Department of Labor shall impose a civil penalty in the amount of one percent (1%) of the employer’s gross profits.

Are employees protected from retaliation?

Lastly, SB 1480 provides whistleblower protection by prohibiting an employer from taking any retaliatory action against an employee for disclosing or threatening to disclose any action that the employee reasonably believes is in violation of the Act or for assisting or participating in any proceeding to enforce the Act. If an employer is found to have violated this whistleblower protection, the employee at issue may be entitled to reinstatement, back pay, liquidated damages (equal to the back pay amount), interest on the back pay, and reasonable attorneys’ fees and costs.

Impact of New Legislation

While SB 1480 requires covered employers to apply for and obtain registration certificate and imposes significant penalties for noncompliance, it also grants employers ample time to prepare and come into compliance, given that the registration certificates are not required until 2024 (three years after the Act’s effective date). However, an employer’s ultimate application for the registration certification will be evaluated based on the employer’s records and business practices predating its application. As such, all covered employers should consider conducting an internal audit process well in advance of the ultimate application deadline, to ensure compliance with the Act and proper documentation supporting such compliance. After all, the last thing any business needs is to forfeit 1% of its gross profits for failing to comply with IEPA.

A knowledgeable employment attorney can help you obtain an equal pay registration certificate and maneuver through the reporting requirements. For assistance with conducting an audit to ensure compliance with the Illinois Equal Pay Act, consult with an experienced Illinois employment lawyer.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.