Illinois Pay Equity Law and Salary History Ban
September 12th, 2019 | Sterling
On July 31, 2019, Illinois Governor Pritzker signed into law HB0834 (the “amendments”) to the Equal Pay Act of 2003 (the “Act”). These enhance prohibitions on pay discrimination on the basis of race or sex, by restricting the ability of employers to inquire about compensation history. The amendments take effect on September 29, 2019.
Equal Pay Act of 2003
The Act was passed as a step toward closing wage gaps by prohibiting Illinois employers from paying unequal wages to workers for the same or substantially similar work. However, the Act provides some exceptions for circumstances in which wage discrepancies are attributable to systems of seniority, merit, or quality and/or quantity of production. Employers who violate the Act are subject to civil penalties of up to $5,000 per violation.
The full text of the Act can be found here: http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2501&ChapterID=68
The amendments were approved and signed by the Governor on July 31, with an effective date of September 29, 2019. They establish that it is unlawful for employers to request or require an applicant to disclose wage or salary history. Additionally, the amendments also make it unlawful to require employees to sign a contract or other waivers which would prohibit them from discussing their compensation with other employees. Punitive standards of the Act are also extended by permitting recovery of actual damages, injunctive relief, attorney’s fees, and up to $10,000 in special damages in actions brought within 5 years of the date of violation. The amendments further clarify that if such information is voluntarily disclosed by the applicant, the employer is not in violation of the Act, provided that the employer does not consider that information in employment or compensation decisions.
The full text of the amendments can be found here: http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=101-0177
Illinois joins a quickly growing list of state and local jurisdictions enacting pay equity and salary history ban legislation in an effort to close wage gaps and promote fair compensation for women, racial and ethnic minorities. Other recent salary history bans have been passed in Alabama, New Jersey, and Toledo, Ohio. As this trend continues, employers are encouraged to review their practices and remain abreast of new and developing pay equity laws and salary history bans that may impact their business.
The information contained herein is for informational purposes only. Clients are encouraged to consult with their legal counsel on the impact of this new law. Sterling is not a law firm, and none of the information contained in this notice is intended as legal advice. This and other important legislative updates can be found on the Sterling website: https://www.sterlingcheck.com/resources/compliance-updates/
This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.