Illinois Governor J.B. Pritzker signed a new law on August 11, 2023, that will amend the Illinois Equal Pay Act (IEPA) and mandate pay transparency in job postings for most Illinois employers. Similar to other state pay transparency laws, including California which enacted its law in September of 2022, the new law will take effect on January 1, 2025, and will apply to employers with 15 or more employees.
New Requirements for Pay Transparency
The amendments make it unlawful for an employer with at least 15 employees to fail to include the pay scale and benefits for a specific job in a job posting in Illinois. Substantial portions of the added text of the Act says:
“Pay scale and benefits” The wage or salary, or the wage or salary range, and a general description of the benefits and other compensation, including, but not limited to, bonuses, stock options, or other incentives the employer reasonably expects in good faith to offer for the position, set by reference to any applicable pay scale, the previously determined range for the position, the actual range of others currently holding equivalent positions, or the budgeted amount for the position, as applicable.
(b-25) It is unlawful for an employer with 15 or more employees to fail to include the pay scale and benefits for a position in any specific job posting. The inclusion of a hyperlink to a publicly viewable webpage that includes the pay scale and benefits satisfies the requirements for inclusion under this subsection. If an employer engages a third party to announce, post, publish, or otherwise make known a job posting, the employer shall provide the pay scale and benefits, or a hyperlink to the pay scale and benefits, to the third party and the third party shall include the pay scale and benefits, or a hyperlink to the pay scale and benefits, in the job posting. The third party is liable for failure to include the pay scale and benefits in the job posting, unless the third party can show that the employer did not provide the necessary information regarding pay scale and benefits. An employer shall announce, post, or otherwise make known all opportunities for promotion to all current employees no later than 14 calendar days after the employer makes an external job posting for the position, except for positions in the State of Illinois workforce designated as exempt from competitive selection. Nothing in this subsection requires an employer to make a job posting. Posting of a relevant and up to date general benefits description in an easily accessible, central, and public location on an employer’s website and referring to this posting in the job posting shall be deemed to satisfy the benefits posting requirement under this subsection. This subsection only applies to positions that (i) will be physically performed, at least in part, in Illinois or (ii) will be physically performed outside of Illinois, but the employee reports to a supervisor, office, or other work site in Illinois. Nothing in this subsection prohibits an employer or employment agency from asking an applicant about his or her wage or salary expectations for the position the applicant is applying for. An employer or employment agency shall disclose to an applicant for employment the pay scale and benefits to be offered for the position prior to any offer or discussion of compensation and at the applicant’s request, if a public or internal posting for the job, promotion, transfer, or other employment opportunity has not been made available to the applicant. This subsection shall only apply to job postings that have been posted after the effective date of this amendatory Act of the 103rd General Assembly.
(b-30) An employer or an employment agency shall not refuse to interview, hire, promote, or employ, and shall not otherwise retaliate against, an applicant for employment or an employee for exercising any rights under subsection (b-25).
So what does that mean for Illinois employers? Read on.
Pay Scale Disclosure
The amendments make it unlawful for an employer with at least 15 employees to fail to include the pay scale and benefits for a specific job in a job posting in Illinois. However, employers can satisfy this requirement by including a hyperlink to a publicly viewable webpage that includes the relevant pay scale and benefits.
Benefits Disclosure
The posting requirement is not just the range of salary, employers are also required to disclose and post information on relevant and up to date general benefits.
Remote Positions
The amendments apply to any positions that (1) will be physically performed, at least in part, in Illinois or (2) will be physically performed outside of Illinois, but the employee reports to a supervisor, office, or other work site in Illinois. That means that remote positions are included in the requirement and pay scale must be included.
Use of Recruiters or other Third-Pary Job Postings
If an employer engages a third party to announce, post, or publish a job posting the third party must include the pay scale and benefits (or a hyperlink), in the job posting unless the third party can show that the employer did not provide the necessary information. So, the use of a recruiter does not allow an employer to skirt around this law.
Must Announce to Current Employees
All posted opportunities for promotion have to be shared with current employees (within 14 calendar days) so external only postings are no longer allowed.
Requesting Salary Expectations.
Employers can still ask an applicant about their wage or salary expectations for the position the applicant is applying for.
Applicants Can File Complaint
The amended act expands the class of individuals who can file a complaint under b-25 (the newly added language listed above) to include “any person that claims to be aggrieved by a violation of that subsection.”
Fines, Penalties for Violations
The Department may initiate investigations (for both active and inactive job postings) of alleged violations of the IEPA upon receiving a complaint from any person who claims to be aggrieved or at the Department’s own discretion.
If the Department determines that a violation has occurred, it may assess fines of up to $500 for a first offense, $2,500 for a second offense, and $10,000 for a third or subsequent offense. Before fines are levied, employers will be given a short notice and cure period for first (14 days) and second (seven days) offenses. However, employers will incur automatic penalties without a cure period for five years following a third offense (which will restart if, during that period, an employer receives a subsequent notice of violation from the Department).
Record Keeping Requirement
Employers will be required to make and preserve records that document the pay scale and benefits for each position, as well as the job posting for each position.
Investigations and Penalties.
The newly added language also adds a new sections c-5, c-7, c-10 and c-15 which details investigation procedures and possible penalties, namely:
(c-5) The Department may initiate investigations of alleged violations of subsection (b-25) of Section 10 upon receiving a complaint from any person that claims to be aggrieved by a violation of that subsection or at the Department’s discretion. Any person that claims to be aggrieved by a violation of subsection (b-25) of Section 10 may submit a complaint of an alleged violation of that subsection to the Department within one year after the date of the violation. If the Department has determined that a violation has occurred, it shall issue to the employer a notice setting forth the violation, the applicable penalty as described in subsections (c-10) and (c-15), and the period to cure the violation as described in subsection (c-10).
(c-7) A job posting found to be in violation of subsection (b-25) of Section 10 shall be considered as one violating job posting regardless of the number of duplicative postings that list the job opening.
(c-10) The penalties for a job posting or batch of postings that are active at the time the Department issues a notice of violation for violating subsection (b-25) of Section 10 are as follows:
(1) For a first offense, following a cure period of 14 days to remedy the violation, a fine not to exceed $500 at the discretion of the Department. A first offense may be either a single job posting that violates subsection (b-25) of Section 10 or multiple job postings that violate subsection (b-25) of Section 10 and are identified at the same time by the Department. The Department shall have discretion to waive any civil penalty under this paragraph.
(2) For a second offense, following a cure period of 7 days to remedy the violation, a fine not to exceed $2,500 at the discretion of the Department. A second offense is a single job posting that violates subsection (b-25) of Section 10. The Department shall have discretion to waive any civil penalty under this paragraph.
(3) For a third or subsequent offense, no cure period, a fine not to exceed $10,000 at the discretion of the Department. A third or subsequent offense is a single job posting that violates subsection (b-25) of Section 10. The Department shall have discretion to waive any civil penalty under this paragraph. If a company has had a third offense, it shall incur automatic penalties without a cure period for a period of 5 years, at the completion of which any future offense shall count as a first offense. The 5-year period shall restart if, during that period, an employer receives a subsequent notice of violation from the Department.
(c-15) The penalties for a job posting or batch of job postings that are not active at the time the Department issues a notice of violation for violating subsection (b-25) of Section 10 are as follows:
(1) For a first offense, a fine not to exceed $250 at the discretion of the Department. A first offense may be either a single job posting that violates subsection (b-25) of Section 10 or multiple job postings that violate subsection (b-25) of Section 10 and are identified at the same time by the Department. The Department shall have discretion to waive any civil penalty under this paragraph.
(2) For a second offense, a fine not to exceed $2,500 at the discretion of the Department. A second offense is a single job posting that violates subsection (b-25) of Section 10. The Department shall have discretion to waive any civil penalty under this paragraph.
(3) For a third or subsequent offense, a fine not to exceed $10,000 at the discretion of the Department. A third or subsequent offense is a single job posting that violates subsection (b-25) of Section 10. The Department shall have discretion to waive any civil penalty under this paragraph.
For the purposes of this subsection, the Department during its investigation of a complaint, shall make a determination as to whether a job posting is not active by considering the totality of the circumstances, including, but not limited to: (i) whether a position has been filled; (ii) the length of time a posting has been accessible to the public; (iii) the existence of a date range for which a given position is active; and (iv) whether the violating posting is for a position for which the employer is no longer accepting applications.
Conclusion
Employers need to familiarize themselves with the amended act and update their policies and practices to ensure it aligns with the new requirements or risk substantial penalties.
If you have questions about how the amended Act may impact your business or other employment law needs, contact Navigant Law Group, LLC at (847) 253-8800 or email us at hello@navigantlaw.com.
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