Updates to the Illinois Equal Pay Act Reporting - American Society of Employers - Anthony Kaylin

EverythingPeople This Week!

Updates to the Illinois Equal Pay Act Reporting

IL LawIn June the Illinois legislature passed amendments to the Illinois Equal Pay Act reporting requirements, which unfortunately makes it more confusing for employers.  This law is ever evolving and will likely evolve again.

First, obtaining a certificate requires a $150 filing fee and submission of a compliance statement certifying, among other things, that the business is in compliance with various federal and state civil rights and equal pay laws and other laws, does not restrict job opportunities to one sex, makes promotion and retention decisions without regard to sex, provides average compensation to its female and minority employees at a rate “not consistently below” average compensation for male and non-minority employees within each of the relevant EEO-1 Report major job categories, and corrects wage and benefit disparities when identified to ensure legal compliance.  This information will not be public information.  However, the amendments are not clear what these “other relevant laws” are, including whether they may encompass (or be argued by the Illinois Department of Labor to encompass) other federal laws beyond Title VII and the federal Equal Pay Act and/or state and local laws outside Illinois.

Next, with the latest amendments, Illinois is now requiring an EEO-1 type report for all Illinois employees. It is to be submitted with annual corporate report to the Illinois Secretary of State and again it is “substantially similar” workplace demographic information, which “data on the gender, race, and ethnicity of each corporation’s employees” the secretary then “shall publish” on its official website within 90 days thereafter.  However, the amendments are not clear what the EEO-1 report is, whether just for locations in a county and by county, or for EEO-1 reports for facilities in Illinois or for all EEO-1 reports filed or just a consolidated report for Illinois or for the entire company.

The requirements were to start in 2024 and every two years after,  but an amendment now requires the Illinois Department of Labor (IDOL) to “collect contact information” from existing and new covered businesses (businesses that become newly covered must submit their contact information to the IDOL by January 1 of the following year), after which the IDOL will assign each business a deadline by which it must apply for the equal pay registration certificate. For existing covered businesses, that deadline may be as early as March 24, 2022, or as late as March 23, 2024, potentially moving the initial certification deadline two years sooner than anticipated and fewer than nine months from the passage of the amended law.

To make it more onerous, 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). In addition to this information, the new amendments now require employers to specify “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 latter part—who knows.

The March 2021 amendments required a business to certify “that the average compensation for its female and minority employees is not consistently below the average compensation,” as determined by the U.S. Department of Labor, for its male and nonminority employees within each of the major job categories in the EEO-1 Report, “taking into account factors such as length of service, requirements of specific jobs, experience, skill, effort, responsibility, working conditions of the job, or other mitigating factors.” The new amendment retains all these factors, and adds “education or training, job location, [and] use of a collective bargaining agreement” to the non-exhaustive list.

Employers now will also have to identify the system used for making wage determinations: the new amendments require disclosure of “the approach the business takes in determining what level of wages and benefits to pay its employees; acceptable approaches include, but are not limited to, a wage and salary survey.”

Employees have rights to access the compensation information and employers will have to set up a process for when employees ask for compensation information.  The new amendments now provide that “a current employee of a covered business may request anonymized data regarding their job classification or title and the pay for that classification,” but note that “no individually identifiable information may be provided to an employee making a request under this paragraph.”

It is recommended that employers with Illinois operations with 100 or more employees work with legal counsel to assess whether they will be able to apply for the required equal pay registration certificate, if required to do so by the IDOL, by the earliest potential date of March 24, 2022; continue taking steps warranted by the March 2021 amendments, including to assess pay equity issues as required by the law; and consider the practical effects of having their EEO-1 employee composition data being publicly available beginning with annual reports filed in January 2023.  This law will likely be amended again as the theoretical and practical applicability are adjusted by the Illinois Legislature.

 

Source: Morgan Lewis 7/7/21, National Law Review 8/16/21

Filter:

Filter by Authors

Position your organization to THRIVE.

Become a Member Today