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, 2024. 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.
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.